After Hours Friends

Written by Janet

The Americans who refuse to sign up for affordable medical insurance could be hit with fines of more than $1,000 under a health care overhaul bill unveiled Thursday by key Senate Democrats looking to fulfill President Barack Obama’s top domestic priority. It’s estimated these fines could raise $36 billion over 10 years. Senate aides said the penalties would be modeled on the approach taken by Massachusetts, which now imposes a fine of about $1,000 a year on individuals who refuse to get coverage. Under the federal legislation, families would pay higher penalties than individuals.

People would be required to carry health insurance just like motorists must get auto coverage now. The government would provide subsidies for the poor and many middle-class families, but those who still refuse to sign up would face penalties. This is called Shared Responsibility Paymentsand the fines would be set at least half the cost of basic medical coverage, according to the legislation. The goal is to nudge people to sign up for coverage when they are healthy, not wait until they get sick.

The legislation would exempt certain hardship cases from fines. The fines would be collected through the income tax system. The new proposals were released as Congress neared the end of a weeklong July 4 break, with lawmakers expected to quickly take up health care legislation when they return to Washington. With deepening divisions along partisan and ideological lines, the complex legislation faces an uncertain future.

Obama wants a bill this year that would provide coverage to the nearly 50 million Americans who lack it and reduce medical costs. The Senate Health Education, Labor and Pensions bill also calls for a government-run insurance option to compete with private plans as well as a $750-per-worker annual fee on larger companies that do not offer coverage to employees.

The Congressional Budget Office, in an analysis released Thursday evening, put the net cost of the proposal at $597 billion over 10 years, down from $1 trillion two weeks ago. Coverage expansions worth $645 billion would be partly offset by savings of $48 billion. The Health Committee could complete its portion of the bill as soon as next week, and the presence of a government health insurance option virtually assures a party-line vote.

The Finance Committee version of the bill is unlikely to include a government-run insurance option. Bipartisan negotiations are centered on a proposal for a nonprofit insurance cooperative as a competitor to private companies. Three committees are collaborating in the House on legislation expected to come to a vote by the end of July. That measure is certain to include a government-run insurance option.

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Tags: Barack Obama, medical plan, people fined for refusing sign up

This entry was posted on Friday, July 3rd, 2009 at 8:26 am and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.