Are mandate exemptions a big deal?

I’m late to this, but last week Sandhya Somashekhar reported that surprisingly few Americans have applied to be exempt from the individual mandate to date.

The government left the door wide open for millions of Americans to be excused from the Affordable Care Act’s requirement that most people must carry health insurance or pay a fine, but so far relatively few have asked for such a pardon.

About 77,000 families and individuals have requested exemptions from the health-care law’s so-called individual mandate, according to internal government documents obtained by The Washington Post. As of April 20, officials had approved tens of thousands of exemption requests and rejected none.

Actually, I’m not so sure we should be surprised. On the one hand, the list of exemption-qualifying events/situations is long and, seemingly, broad. The following list of exemption-worthy circumstances is quoted from

  • You’re uninsured for less than 3 months of the year
  • The lowest-priced coverage available to you would cost more than 8% of your household income
  • You don’t have to file a tax return because your income is too low
  • You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider
  • You’re a member of a recognized health care sharing ministry
  • You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare
  • You’re incarcerated, and not awaiting the disposition of charges against you
  • You’re not lawfully present in the U.S.
  • You were homeless
  • You were evicted in the past 6 months or were facing eviction or foreclosure
  • You received a shut-off notice from a utility company
  • You recently experienced domestic violence
  • You recently experienced the death of a close family member
  • You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property
  • You filed for bankruptcy in the last 6 months
  • You had medical expenses you couldn’t pay in the last 24 months
  • You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member
  • You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you do not have the pay the penalty for the child.
  • As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace
  • You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act
  • Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable
  • You experienced another hardship in obtaining health insurance

And, last year, the Department of Health and Human Services estimated “that approximately 12 million applications for exemptions will be submitted to the Exchange for calendar year 2016.” Of course, that’s 2016, not 2014. (I’m not aware of a 2014 estimate, but should it be so different from 2016’s?)

On the other hand, it’s May, and payment of the penalty is due almost one year from now, at time of tax filing. Isn’t that the time people are most likely to become aware of and file for an exemption? says, “You can claim these exemptions when you fill out your 2014 federal tax return, which is due in April 2015.” As we’ve just seen in the late surge of exchange enrollment, Americans are procrastinators, if nothing else.

All of which is to say that I’m not convinced 77,000 exemption applications as of right now tells us anything about the demand for exemptions in 2014 entire. This appears to be yet another example of people making something out of an essentially meaningless number.


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