The Uninsured Lack Basic Knowledge About Obamacare

January 10, 2014

A troubling survey released yesterday indicates that most uninsured Americans lack even basic knowledge about Obamacare. The survey from Enroll America found that 68% of uninsured adults had not yet logged onto the exchanges. 69% of the uninsured were unaware of tax subsidies. And 81% of uninsured adults were unaware of the deadline to sign up for health insurance to avoid the individual mandate tax penalty. (If you are uninsured and are unaware of the deadline, it is March 31, 2014. Consider this if you wish to avoid paying the penalty.)

This data reveals one of the pitfalls of having a complex tax code. Obamacare’s system of penalties and subsidies is designed to shepherd the uninsured onto the exchanges through financial incentives, administered by the IRS. But if people are unaware of what the IRS is even doing, there is no way those financial incentives can actually achieve their intended effects.

If these taxpayers don’t learn more about Obamacare – and quickly – they will be in for a rude surprise when they find out they are subject to the individual mandate penalty – some 1% of your household income, or $95 per person, whichever is higher.

The tax code is very long and complex – enough that people have a hard time holding all the rules in their heads at once, especially new ones. Therefore, attempts to incentivize behavior through the IRS will frequently be much less effective than lawmakers hope.

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