No more than 15 percent of Colorado voters will face a decision on whether to buy health insurance or pay a tax penalty instead in 2014.
As few as 1 percent of voters could end up actually paying the penalty.
Nailing down precise estimates is tough. Reality may be somewhere in between these figures, when the Affordable Care Act and its mandate to buy insurance takes effect in 18 months.
Those rough calculations were made for Colorado Public News by the Colorado Health Institute, the state’s collector of statistics on health care.
The numbers are estimated to be so low because the health care law contains numerous exemptions.
Also, many people qualify for subsidies from the federal government. Some of them are expected to buy insurance, instead of paying the penalty. A family of four with a current income of up to $88,000 qualifies for a subsidy.
“There are a lot of moving parts,” said Jeff Bontrager of the Colorado Health Institute, noting that the estimates are based on decisions that are yet to be made by real human beings. Bontrager and his economist colleagues must make assumptions about how many people will do what, based on past experience.
The number of Colorado’s 3.3 million voters affected is important because the tax/penalty is playing out to be a major campaign issue this November. Republicans are counting on broad voter anger over the principle of requiring Americans to purchase health insurance. But how many end up paying the penalty may – or may not – make a difference to voters.
Here’s how Bontrager reached his figures, based on his estimates and those made by economist Jonathan Gruber of the Massachusetts Institute of Technology in a study for Colorado’s new state health insurance exchange. Gruber, who favors the law, projected totals for 2016, after the penalty has been in effect for two years.
Start with 900,000 uninsured Coloradans (slightly more than today due to population growth).
As detailed in a Kaiser Family Foundation flowchart that illustrates how the individual mandate works under the Affordable Care Act, first deduct:
- 130,000 low-income Coloradans, who will now get free Medicaid insurance.
- 152,100 undocumented people, who are exempt from the penalty as well as benefits of the law, and who can’t vote.
- 120,900 who have various other exemptions. This includes exemptions for anyone who must pay more than 8 percent of their income to buy insurance; people who earn so little they don’t have to file a tax return; low-income people not receiving Medicaid insurance for free; religious objectors to standard health care; members of a Native American tribe; and prisoners.
That leaves about half a million Coloradans – or 15 percent – who will have to buy insurance or pay a penalty.
Next, using rough estimates for the number of uninsured who will choose to purchase policies, deduct:
- 160,000 Coloradans who will receive new employer insurance, due to subsidies and penalties for employers.
- 220,000 who will receive subsidies and choose to buy insurance.
Then deduct those who won’t be casting ballots:
- 65,000 legal residents who are not yet citizens and can’t vote.
- 10,000 children (20 percent of the remainder) who can’t vote.
That leaves approximately 42,000 of the state’s 3.3 million voters left to pay the penalty. Cut that down to the 88 percent of voters who actually cast a ballot, and the number drops to 36,960 – or just over 1 percent who pay.
But every one of those numbers is an estimate. For example, the count of undocumented people living in Colorado is notoriously inaccurate. There’s a also a fair amount of guesswork in deciding the number of people who will take a subsidy and buy insurance.
By way of comparison, in Massachusetts – which has had mandatory insurance since 2006 when Mitt Romney was governor – 2 percent of the population currently pays a penalty rather than buys insurance.
So the reality is: Significantly fewer than 15 percent of Colorado’s voters will pay the penalty. Exactly how many?
Ask in 2016 if this estimate was correct.
