Obamacare Enrollment Spiked Ahead of Mandate Tax Deadline

Once again, people love waiting until the last minute.

A woman reads the HealthCare.gov insurance marketplace internet site in Washington, DC, December 2, 2013.
National Journal
Aug. 13, 2015, 9 a.m.

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.”

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