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Study finds some Americans are opting to pay fine rather than buy insurance

Study finds that some Americans are opting to pay fines rather than buy insurance
Study finds that some Americans are opting to pay fines rather than buy insurancePhoto by Professor Metze

As the reports slowly seep out that only 106,000 Americans actually signed up and paid for health insurance in the first month after the Patient Protection and Affordable Care Law went into effect and the person responsible for the failed website launch has resigned confusion still exists over the law requirements. It is difficult to obey a law that nobody understands.

A survey conducted by Princeton Survey Research Associates International (PSRAI) has found that approximately four in 10 Americans (38%) would rather pay a fine than buy health insurance, according to a new insuranceQuotes.com report. There is also still a great deal of confusion over the law. Almost eight in 10 Americans who know about fines incorrectly think that children under the age of 18 are exempt from fines. Six in 10 falsely believe that senior citizens over the age of 65 are exempt.

The results reflect Americans' responses to a hypothetical scenario (a 45-year-old individual who earns $50,000 per year). A typical health plan would cost this person $3,000 per year. If this person did not buy health insurance, the fine would be $400. "One of the key questions surrounding the Affordable Care Act is whether or not young Americans – especially healthy young Americans – will sign up for health insurance. This research sheds a positive light on that segment of the population. However, it's concerning that about three in 10 Americans still don't know about the possible fines," said Laura Adams, insuranceQuotes.com's senior analyst.

The insuranceQuotes.com report also found that most Americans are confused regarding the penalty amounts, which are the greater of $95 or 1% of household income above the filing threshold ($10,000 for individuals and $20,000 for families). For an individual who earns $30,000 per year, the penalty would be $200. Only 21% of Americans who know that uninsured people will be fined correctly pegged the amount between $100 and $250 (38% overestimated and 36% underestimated). And many are uninformed regarding how to pay the penalty. Only 64% correctly said the fine would come from their federal income tax refund.

Michelle Snyder, the HHS official who was in charge of the website launch, is leaving her position.

PSRAI obtained telephone interviews with a nationally representative sample of 1,013 adults living in the continental United States. Interviews were conducted by landline (507) and cell phone (506, including 260 without a landline phone) in English by Princeton Data Source from November 14-17, 2013. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.6 percentage points.

President Barack Obama has promised to fix all problems related to the website. "The law is working: Already, nearly 365,000 people across the country have picked private plans through the Marketplace -- and 800,000 more are on track to get Medicaid through their states. These are people for whom health insurance might not have previously been an option -- people who in the past might have been discriminated against for simple medical conditions like asthma, or who may have been dropped from their coverage just because they got sick. Now, thousands of Americans are signing up for coverage every day. That matters. It means financial security for families all across the country. It means freedom from the fear that one illness or accident might cost you everything you've worked so hard to build," Obama said.