• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Pelosi Plan Makes Millions of People Pay Fines

    Speaker Nancy Pelosi’s (D-CA) health care plan presumes that about 8-to-14-million American workers will pay fines rather than buy health insurance. Unless they do, there’s a $167-billion hole in her financing plan and everything falls apart.

    Like the rest of us, this group would face higher-than-ever insurance prices under Pelosi’s proposed bill.

    Speaker Pelosi, President Obama and others claim they will make coverage cheaper, yet the official projection relies upon millions who would prefer to pay fines rather than join their system. In some cases the individuals would pay the penalty; in others their employers would pay; and sometimes both.

    The estimate of 8-to-14 million who would be fined is based on the official projections made by the Congressional Budget Office (CBO).

    The plan is built around a major contradiction. Only if it fails to make insurance more affordable would the bill generate the promised $167-billion by fining people who would still remain uninsured.

    Why would this happen? Because insurance would become more expensive if the legislation passes, thus increasing the disincentives to buy coverage.

    Premiums under the new government-run “public option” will probably be higher than from private insurance, according to CBO (page 6 of its report). The Associated Press reports that, “premiums in the public plan would be higher than the average for private plans.” Rather than inducing private carriers to lower their premiums, other experts agree that private insurance will also be costlier under Pelosi’s plan, as insurers pass along the bill’s tax increases.

    Yet Speaker Pelosi claims the measure will bring “lower costs for every patient” by “lowering health care costs for all of us.” President Obama campaigned on a promise that his plan would save families $2,500 a year in lower premiums. He doesn’t mention that figure anymore.

    The exact number of those who will pay fines is unknown, but is huge. Here’s how the projection of 8- to 14-million was calculated, based on the CBO report:

    • It starts with the finding by CBO that $167-billion in penalties would be paid in the next ten years–$135-billion by employers who don’t provide insurance and $32-billion by workers who don’t buy it. For companies, it’s an 8% payroll tax; for individuals it’s a convoluted formula that comes out to about 2 or 2.5% of income.
    • CBO concluded that by 2019, the employer tax would generate $27-billion a year. Since that’s 8%, it represents a tax on $340-billion in wages. If an average wage were $40,000, that would represent 8.4-million workers for whom fines would be paid.
    • CBO also says by 2910 the annual fines paid by individuals would be about $6-billion per year. If their average wage were $40,000, it would represent 6-million tax filers (individuals and couples) paying the penalty.
    • There would be overlap between the groups, so the total paying the penalty should be in the 8 to 14-million worker range—akin to about 1 worker in every ten nationwide.

    For this group of uninsured, the Pelosi plan makes them pay a lot and get little or nothing.

    This is not a “millionaire’s tax”. It’s a tax on the uninsured. According to The New York Times, these tend to be “the working poor.”

    Only a fraction of these Americans might receive some form of subsidy or assistance under the Pelosi Plan. Yet sponsors claim they will finance the plan by collecting $167-billion in taxes from the uninsured! It contradicts the very premise of the legislation.

    While attention has focused on the “public option” provision, the notion of collecting billions of dollars from millions of Americans—and still leaving them uninsured—is a serious wrong that deserves serious attention.

    Posted in Obamacare [slideshow_deploy]

    9 Responses to Pelosi Plan Makes Millions of People Pay Fines

    1. David Amrine Fairfi says:

      This story is why they included that everyone has to send all of there banking info to the government This is mandatory for all wheather you enrole or not. Please read pages 59-63 in the bill HHR-3200.

    2. Noel, Idaho says:

      Does the Constitution allow congress the right to fine people for not having health care. I don't see it in the Constitution that the congress has the right to force anyone to have health care. hat say ye?

    3. Freedom of Speech TX says:

      Dear Noel Idaho,

      You are correct but when did THAT stop government from legislating nonsense?

      Remember there is a dangerous line of thinking that has infected our judicial system, politicians, and universities. It is the belief that the "Constitution is a living, breathing, document." What does that really mean? Don't really know except it sounds like an "opportunity" to interpret the Constitution in a manner to fit progressive agendas. I don't remember any of the Federalist papers or founders talking about a living, breathing, document.

      I do know that it expressly states that we have the right to life, liberty, and the pursuit of happiness.

      How can we pursue happiness and liberty if the government has morphed into the very thing we fought King George III over? Oppressive taxation and "misrepresentation as to HOW MUCH we would like to prostrate ourselves for in taxes and liberties".

    4. Brian Trester says:

      maybe its time we took a page from our founding fathers and revolt. It seems the America of our founding Fathers is dead and gone we have elected an admitted socialist and have a socialist congress. Thomas Jefferson even stated that a revolt would help keep the government in line. The tree of Liberty unfortunatly is feed by the blood of the just.

      Congress esp the democrates have shown us they are unwillingess to listen to the people we are soon gonna experiance a large Taxation without true representation. Maybe its time for the true patriots and states to suceed from the union.

      I still love America but she is almost dead thanks to the liberals and socialist.

    5. John McClain, GySgt, says:

      If this is passed, and if it is ratified, I will be paying my share of the fines in the currency of the new millenium: ammunition. I will not allow Congress to dictate the meaning of the Constitution to me, nor will I allow them to continue to ignore it any longer. We shall defeat this bill by intimidation of numbers, of honest and honorable citizens who rise up and refuse to accept it, and march on Washington, or we will defeat the illegal, foreign government, formed by the socialists as a central government and therefore illegitimate, since the Constitution forbids such a thing, with a new Declaration of Independence, and a War against this government, until the last treasonous traitor is hanged or shot. Let me be the first to die in this war, I care not, if I have not the freedom I earned for myself, my family, and my posterity, the same way our founders did: by service in War as a Marine. I have long prayed for peace, I am prepared to do the only thing which has ever brought about peace: make war on the tyrants who presume to rule over us.

      John McClain

      GySgt, USMC, ret.

      Vanceboro, NC

    6. Jimmy Fields, Pauls says:

      Rally around the flag and constitution our forefathers fought and died for to give themselves and future generations of the United States of America Liberty and Freedom. We must be willing to stand strong against those who scheme to take it away. Is our present administration scheming to end the American way of life? I believe the patriot citizen knows the answer to that question. Open your eyes and know the truth friend, otherwise the future may call you comrade.

    7. Pingback: Unconstitutional Mandate Attacked from the Left | Fix Health Care Policy

    8. Pingback: Unconstitutional Mandate Attacked from the Left | Conservative Principles Now

    9. Pingback: July – Dec 2009 Browseworthy Stories Archives « Clear Thinking

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.