Did 15 Million — Not 6.6 Million — Pay Obamacare’s Mandate Penalty?

The media have reported that 6.6 million “taxpayers” paid the Obamacare penalty (tax) for not obeying the individual mandate to buy federally qualified health insurance in 2014. However, the actual figure must be much larger.

The report by the Taxpayer Advocate discusses “returns,” although not individual taxpayers. It reports that 2.6 million 2014 returns claimed Obamacare’s premium tax credits, totaling $7.7 billion paid out, and an average pay out of $3,000 (page 39, figure 3.3.1).

We know from other sources that about 6.14 million individuals claimed tax credits for Obamacare coverage last year (87 percent of 7.06 million individuals). (And that is only if we count people who signed up during open enrollment, which ended in March 2014. Because special enrollment continued throughout the year, most of those who signed up later would also have claimed tax credits.)

So it looks like we have at least 2.36 Obamacare-enrolled individuals per household filing a tax return claiming a premium tax credit. Although, the U.S. Department of Health and Human Services reports an average tax credit of $264 per individual per month, which would add up to $3,168 per year – about the same as the Taxpayer Advocate reports for the average return. Of course, only about half of Obamacare enrollees stay enrolled for the whole year, so maybe these dollar figures are not as confusing as they initially appear.

Anyway, if we flip around the number of individuals per return, we would guesstimate that those 6.6 million returns that paid penalties for not obeying Obamacare represent about 18 million individuals.

* * *

For the pivotal alternative to Obamacare, please see the Independent Institute’s new book, A Better Choice: Healthcare Solutions for America, by John C. Goodman.