Higher fines compel PPACA sign-ups News added by Benefits Pro on April 21, 2014

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By Kathryn Mayer

When it comes to health insurance — or rather, not having health insurance — money talks.

That’s the finding from Gallup, which concluded that higher fines in Obamacare will compel many uninsured Americans to sign up for health coverage, indicating that PPACA’s incentives could work in getting more people covered.

For a $95 fine — the amount for not having insurance in 2014 under the Patient Protection and Affordable Care Act — uninsured Americans are as likely to say they would not get insurance (46 percent) as to say they would (47 percent).

But as the amount increases, the more likely they are to get coverage. At a $500 fine level, the percentage of uninsured saying they would get insurance jumps to 60 percent.

This percentage levels off at a $1,000 fine level at 62 percent.

Under PPACA, virtually all Americans must have insurance or pay a fine. In 2014, the fine is $95 or 1 percent of household income, whichever is greater. The fine increases to $325, or 2 percent of taxable income, in 2015 and $695, or 2.5 percent of income, in 2016.

For its research, Gallup interviewed 4,829 Americans without health insurance between Jan. 2-April 3. Uninsured Americans were randomly assigned to three groups, each testing respondents’ likelihood to sign up for insurance under different fine conditions of $95, $500 and $1,000.

Gallup found that across all fine levels, people who reported being in “excellent” or “very good” health were less likely than their sicker counterparts to sign up for insurance. Still, increasing the fine does increase the likelihood that healthier adults will enroll in a plan.

Political affiliations also affect consumers’ willingness to buy insurance rather than pay a fine, in line with other findings about how such affiliations affect attitudes toward PPACA. At each fine level, those who identify as Republican are about half as likely to report a willingness to sign up for health insurance as those who identify as Democrat.

So, what do the findings mean? Researchers say it indicates that the increased fines in the coming years under PPACA may increase the number of uninsureds signing up for coverage — to a point.

The increased fine amounts, Gallup researchers said, “could compel a significant amount of still-uninsured Americans who did not sign up during the open enrollment period to do so in 2015.”

“This increase could begin to taper off between the 2015 and 2016 tax years if the average fine moves between $500 and $1,000. At this point, there is a distinct possibility that the growth in the insurance coverage rate will either slow down or stall based on expected future fine levels.”

Originally published on BenefitsPro.com
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