State law increases penalties mandating health insurance

Mass. lifts penalties in law mandating health insurance

 

Massachusetts strengthened its law mandating that all residents acquire health-care coverage by as much as quadrupling the maximum penalty payable by those who don't do so...

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Massachusetts strengthened its law mandating that all residents acquire health-care coverage by as much as quadrupling the maximum penalty payable by those who don't do so, the Boston Globe reported in its online edition. That penalty could reach $912 in 2008, compared with $219 in 2007, the paper reported. The law, signed by former Gov. Mitt Romney in April 2006, was designed to pressure residents to buy insurance rather than rely on the fact that hospitals must provide care regardless of whether their patients can pay for the services, the paper reported. The 2007 penalty for not buying insurance was loss of the personal-income-tax exemption; the 2008 sanction is tied to the lowest-cost insurance option, the paper reported.

 

The cost of not having health insurance in Massachusetts is going up.

 

When the new year begins Tuesday, most residents who remain uninsured will face monthly fines that could total as much as $912 for individuals and $1,824 for couples by the end of 2008, according to penalty guidelines unveiled by the Department of Revenue on Monday.

 

Individuals who failed to sign up for health insurance by the end of 2007 faced only a one-time loss of their $219 personal income tax exemption.

 

The fines are part of an increasingly aggressive approach written into the health care law designed to pressure Massachusetts residents into getting insurance. The law, intended to create near-universal coverage in the state, was approved by lawmakers and signed by former Gov. Mitt Romney in 2006.

 

It remains unclear how many Massachusetts residents still don't have insurance, but the number could be in the hundreds of thousands.

 

The penalties, which vary with age and income, are based on half the lowest cost plans available through the Health Care Connector. They accrue each month an individual remains uninsured and will be due as part of tax returns filed early in 2009.

 

The penalties apply only to adults deemed able to afford health insurance by the Health Insurance Connector Authority, which oversees the health care law. People can apply for hardship appeals.

 

The highest fine of $76 a month -- or $912 a year -- will be levied against those over the age of 27 making more than three times the federal poverty level of $30,636 for an individual.

 

Married couples who are both uninsured will have to pay fines individually. A couple earning more than $41,076 would have to pay $1,824 in penalties for the year.

 

The fines drop for younger adults and fall even lower for those making less than three times the poverty level. There are no fines for individuals earning less than $15,325 a year.

 

Revenue Commissioner Henry Dormitzer said the department worked to come up with penalties that were fair and easy to understand.

 

John McDonough, executive director of the advocacy group Health Care for All, said the penalties were a good compromise. The way the law was written, 59 year olds could have faced penalties five or six times higher than younger adults in their 20s because their insurance plans typically cost more, McDonough said.

"Some will say these are too high. Some will say these are too low. There is plenty of room for argument on both sides," he said. "We are in such uncharted territory."

 

No one knows for sure how many taxpayers will face the fines.

 

Those overseeing the law say the state has added about 300,000 Massachusetts residents to the ranks of the insured this year -- largely as a result of the law.

 

Leslie Kirwan, Gov. Deval Patrick's top budget chief and chairwoman of the Connector board, said estimates of the number of uninsured in Massachusetts before the law took effect ranged from 370,000 to more than half a million.
 
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