Saturday, September 11, 2010

ObamaCare: The Individual Mandate

ObamaCare hinges upon the individual mandate. The mandate is the legal requirement of every American to obtain health insurance coverage that meets the government's "minimum essential coverage". The problem is that the U.S. Constitution, established long before any living legislator voted to pass ObamaCare, does not require individual citizens to purchase any particular good or service. (1)

Besides a certain group of legislators somehow having "special knowledge" enabling them to pick and choose a particular good or service for individual citizens, let us investigate the individual citizen's failure to meet the mandate. We have heard of the fine but exactly who is at risk of being fined? What exactly is the fine?

Who is at risk of being fined by ObamaCare?

If you do not receive coverage through a government sponsored program, or your employer does not offer coverage, or some other group sponsored setting (e.g. union, association, etc.), then you must buy coverage. Failure to buy coverage results in a fine. (2)

What exactly is the ObamaCare fine?

In 2014 the fines begins at $95 or 1% in annual income which ever is the greater. In 2015 the fine become 2% of annual income or $325 which ever is greater. In 2016 and later the fine becomes $695 or 2.5% of income . (3)

What about families? An ObamaCare fine-formula exists for families. The formula is as follows:

Family fine formula: (uninsured adult = 1 fine unit) + { uninsured children = 1/2 fine unit) x $695 = ObamaCare fine.

Plugging a family of four into the above formula, in the year 2016, the family would pay an ObamaCare fine of $2,085. The fine is prorated if you, your spouse, or children were covered for a number of months during the year e.g. covered for three months means 3/12 x $695 times number of fine units. (4)

There is an exemption. Apparently, those between some slim line, the line of qualifying for government sponsored health-care and the line of income inability to buy "essential coverage" receive an exemption from the ObamaCare fine. The exemption is: an exemption income threshold will be applied (yet unknown) by the secretary of Health and Human Resources. Presumably the poverty level threshold will be applied.

What might surprise you is that ObamaCare has already calculated the total fine that will enter government coffers. According to the Congressional Budget Office (CBO), ObamaCare expects $17 billion in ObamaCare fines in 2019. (5)



(2) Bad Medicine, A Guide to the Real Costs and Consequences of the New Health Care Law, Michael D. Tanner, Cato Institute, page 2.

(3) Ibid.

(4)Patient Protection and Affordable Care Act, public law 111-148, subtitle F, part 1, section 1501.

(5) March 20. 2010, director of the Congressional Budget Office, Douglas Elmendorf, in a letter to House speaker Nancy Pelosi .


  1. Am I correct in this logic? $200k family income. Two parents + 6 kids. That equals the equivalent of 5 adults. Does that mean that each of those five would incur a fine of 2.5% of family income ($5,000)? So a total family fine of $25,000?

  2. No matter how I do the math on the premiums, or the math on the fines, (which can turn out to be a nearly equal amounts in the next couple of years), if you can't afford it without selling your car, starving your children or living in a box, then you are screwed!