#ACATaxTime Enrollments: Will my 600K - 1.2M estimate be on target?
2019 OPEN ENROLLMENT ENDS (most states)
Time: D H M S
Thanks to HonestyinGov for giving me a heads up (via Twitter) to this Wall St. Journal article by Stephanie Armour the other day regarding a new survey (and several interviews with tax preparers) which claims that overall, those who will owe a tax penalty for not being insured last year and are still uninsured this year are not likely to go ahead and enroll during the 2015 tax filing season currently ongoing:
Major tax-preparation firms say many customers are paying the penalty and not getting health insurance. It is still early, since the special enrollment period launched Sunday, but research also suggests that many people who lack health insurance will pay the penalty and not get covered this year.
Only 12% of uninsured people would buy policies if informed of the penalty, according to a survey of 3,000 adults polled through Feb. 24 by McKinsey & Co.’s Center for U.S. Health System Reform.
At H&R Block Inc., “our analysis indicates that a significant percentage of taxpayers whose household members were not covered for at least a portion of 2014 are opting” to pay the penalty, said Mark Ciaramitaro, a vice president of health-care enrollment services at the tax-preparation firm.
Here's the part where people are probably expecting me to try and challenge the survey results, bla bla bla. Wrong.
If you look at my own ballpark/spitball estimate of how many people are likely to take advantage of the 6-week "#ACATaxTime" period, here's what I said:
Since then, I've thought it over and decided to be more cautious--I honestly have no clue how many people will follow through and enroll during this period (all I know for sure is that the total number eligible to enroll is somewhere between 0 and 6 million nationally). In the interest of caution, I'm lopping this down to just 1 million even today (it could be higher or lower, of course).
Later in the piece I concluded that:
Of course, there's no way of knowing whether MN is in any way representative of other states, but this at least gives us a good preliminary, rough idea of what the possibilities are. 600K - 1.2M seems like a reasonable range for the moment.
In addition, the estimate of "up to 6 million people" was also clarified after some discussion (including input from Ms. Armour, as it happens):
UPDATE x3: Confusing things further, it was also pointed out to me that the 3-6 million households include some number (likely around 20% or so) who qualify for an exemption from the non-coverage penalty, which means the range is presumably back down to between 3.6 - 7.2 million people.
So, assuming the McKinsey & Co. survey is accurate, that's 12% of between 3.6 - 7.2 million people total...or around 430K - 860K people who are likely to enroll during the 3/15 - 4/30 tax SEP.
"Ah-ha!" You're saying...that's a lot less than 1 million!
True, except that there will also be other people enrolling who don't qualify for the tax season SEP...but who do qualify to enroll due to qualifying life events (getting married, giving birth, losing their existing coverage, moving to a new state, etc.). Last year that averaged roughly 8,000 - 9,000 people per day during the off-season. This year, even assuming that it's only around 5,000 - 6,000/day, that would still be a good 220K - 270K during that 45-day period.
Add those to the "Tax Season-specific" enrollees, and you get a likely 45-day enrollment total of between 650K - 1.13 million people...right in the same zone that I'm expecting.
As for the WSJ article itself, it takes a decidedly negative attitude ("only 12%", etc), and I suppose that does sound a bit disappointing. On the other hand, I also wonder how many of these people understand that while the 2014 penalty was pretty nominal ($95/adult + $47.50/child or 1% of their taxable income), the penalty next year for 2015 will be much higher ($325/adult + $162.50/child or 2% of their income), and after that it jumps up to $695/adult, $347.50/child or 2.5% of your household income.
In short, while I'm only expecting around 600K - 1.2 million to enroll during the tax SEP this year, I suspect the penalty will convince considerably more to cave in years to come.