Obamacare’s individual mandate didn’t compel as many people to sign up for insurance as some experts expected, but it still had a notable impact during tax season this year. According to new data from the Obama administration, sign-ups spiked with the April 30 deadline.
The numbers suggest that the mandate penalty, set to increase again in 2016, might be starting to have the desired effect. That’s what the Affordable Care Act is going to need in order to enroll more (presumably healthier) people, moderate lingering concerns about premiums under the law, and continue shrinking the number of uninsured.
The Obama administration allowed people facing the mandate penalty in 2014 to sign up for insurance coverage through HealthCare.gov, which serves 30-plus states, through April 30 in what’s known as a special enrollment period. The idea was that Americans would be paying the mandate penalty for the first time when they filed their 2014 taxes this year, and this would give them a chance to avoid the penalty for most of 2015 and going forward.
The overall numbers were tepid: Just 143,707 people chose to sign up for coverage because of the mandate. But according to the new Centers for Medicare and Medicaid Services data, the sign-ups did increase dramatically with the April 30 deadline.
More than 38,000 people signed up on April 30, by far the biggest sign-up day since regular enrollment ended Feb. 15. The daily average from Feb. 23 to March 14 had been 5,000, and it fell back to 6,000 from May 1 to June 30.
Outside of people facing the mandate, most people signing up under special circumstances had lost their previous health coverage. A total of 943,934 Americans enrolled from Feb. 23 to June 30. During the regular open-enrollment period, Nov. 15 to Feb. 15, about 10 million people bought insurance.
While ACA enrollment did jump in concurrence with the tax deadline, the raw number of 143,707 was underwhelming for many observers. That could be because the mandate penalty for 2014, which is what people were paying this tax filing, was relatively small: $95 or 1 percent of income, whichever is greater. That increases to $325 or 2 percent of income for 2015.
But the real test is likely 2016, when the full weight of the mandate penalty kicks in: $695 or 2.5 percent of income. Experts are waiting to see if that compels more of the 20 million-plus uninsured Americans remaining to sign up.
“The individual mandate is the real wild card here. Some people point to the special enrollment period during tax season as an indication that the individual mandate is not looming large in people’s minds. But I think that is not a good test,” Larry Levitt, senior vice president at the Kaiser Family Foundation, told National Journal last month. “I think 2016 will be the first real-world test of a tough individual mandate.”