First the penalty even at maximum is a small percentage of the actual cost of healthcare. So, if a young person does not think paying inflated healthcare premiums is a good investment or a family has other places to spend $16,000, the penalty is not a major deterrent.
The penalties are:
2014 - $95 per person or 1% of household income
2015 - $325 per person or 2% of household income
2016 - $695 per person or 2.5% of house hold income
with the maximum family penalty capped at $2,085 (or 300% of the minimum penalty - 300% x $695)
Kaiser Family Foundation (KFF) study found that in 2013 employer insurance policies averaged $16,351 for families and $5,884 for singles.
The difference between maximum penalty of $2,085 and average family insurance costs of $16,351 is a hefty $14,266. That's a chunk of change, but of course, just making sure you don't have an income tax refund will mean you won't even pay the $2,085.
Scandlen then points out the really big problem with the individual mandate: it is impossible to enforce.
"It isn’t just in health insurance. Auto insurance is mandated in almost every state, but the rate of non-compliance is about 14 percent nationally and in many states the rate of non-insurance for auto (which is mandated) is even higher than for health (which is not). Similarly, with other mandates — child support, helmet laws, seat belt laws, even taxes. Non-compliance is always about 15 percent, even when there are severe penalties such as jail time for violation."Veronique de Rugy details the political problem with other than the current almost voluntary (via tax refund) penalty. It was specifically designed that way because politicians couldn't stomach the political outrage that would ensue if liens were put on people's property or wages garnished or the non-insured were carted off to jail. If people don't like Obamacare now, imagine the response if they saw their kinfolk, friends or neighbors facing big fines or jail.
The individual mandate is a lose-lose political proposition. It doesn't force compliance, and it irritates and incites defiance of government policies all at once.
The Obama administration delays on enforcing the employer mandate and sections of the individual mandate are creating another problem. With not too many young people signing up to pay a good deal more than their fair share in order to cover older, sicker people, premiums for everyone, as well as deductibles, are expected to take a significant jump.
A survey by HealthPocket.com found the deductibles on the exchange plans were 42 percent higher than employer based policies. But now, insurers say Obamacare consumers can expect to experience sticker shock from both premiums and deductibles.