Yesterday afternoon, the Department of Revenue (DOR) released their draft penalty guidelines for the uninsured in 2009 as well as an updated report on insurance mandate compliance in 2007. Click here for the press release, here for the draft penalties and here for the report.
The implementation of the Individual Mandate in 2009 will look very much like 2008, and we thank DOR for releasing the penalties in advance of their January 1st start date and for maintaining last year's simple and fair model. For those tax-filers under 150% of the federal poverty level, there is no tax penalty. For tax-filers between 150.1 and 300% fpl, the penalties will remain largely the same as last year, changing only by removing $0.50-an unexpected surprise. For those above 300% fpl, the penalty is based on the lowest-cost plan available (the penalty is half the monthly premium).
For young adults, the 2009 monthly penalty actually decreases $4 to $52/month, based on lowered premiums. The penalty for those over age 26 increases $13 to $89/month, largely due to the minimum creditable coverage requirement for prescription drug coverage.
DOR is holding an open public comment period through January 23rd. Comments can be directed to the Department's Rulings and Regulations Bureau at firstname.lastname@example.org.
The ACT!! Coalition has been interested in learning more about who the uninsured are in Massachusetts. Early this past summer, DOR released preliminary data on the uninsured, based on tax-filing season; the new report is an updated and more detailed version, including late-filers. The report is mostly consistent with what we already know about Massachusetts uninsured: the state is making incredible progress in covering residents with health insurance. And those who remain uninsured are more likely to fit in certain demographic categories. A unique puzzle piece this report adds is how the Affordability Schedule functions. This data is not a complete picture, since it only reflects information from those who file taxes.
By approximately a 2:1 ratio, uninsured are more likely to be under 40 years of age, male, single, and low-income (62% under $25,526/year). Interestingly, almost all regions of the state reported an uninsurance level of 2.5-3.3%. The outlier is the Cape and Islands. Nantucket's rate was the highest at 12.6%, with Dukes County (Martha's Vineyard) at 7.5%, and Barnstable County at 4.3%.
According to the DOR data, 5% of Massachusetts adult tax-filers are uninsured. (This data is 3-4 months older than the recently released Sharon Long/DHCFP report, and it also doesn't include children, who are more likely to be insured.) Three percent of tax filers were uninsured but deemed able to afford insurance and nearly 2% were uninsured and unable to afford health insurance. Including individual exemptions, just over 2% of tax filers were exempt from the mandate. The Affordability Schedule and exemption process offers protection to those 76,000 who cannot afford insurance. And for those 118,000 who were deemed able to afford insurance, the state collected approximately $16 million. The state reached out to these individuals, letting them know of the mandate and health insurance options.
Happy holidays, all.