After weighing options, some find tax penalty a better deal than insurance

While the threat of larger tax penalties for not enrolling in a health insurance plan appears to be motivating more previously uninsured people to obtain coverage, there is still a sizable group that is opting to pay the fine rather than incur the cost of premiums and copays (Source: “Many See I.R.S. Penalties as More Affordable Than Insurance,” New York Times, Jan. 4, 2016).

People who earn too much to qualify for federal subsidies that defray the cost of coverage may be most likely to opt out. A recent analysis by the Kaiser Family Foundation found that more than seven million people who are eligible for exchange coverage would pay less in penalties than for the least expensive insurance available to them. More than half would not qualify for subsidies.

Many holdouts have made their decisions after meticulously comparing the cost of insurance premiums and deductibles with paying for doctor appointments, lab tests and prescriptions themselves. For some healthy people, the combined cost of premiums and deductibles, which can exceed $10,000, makes the penalty seem a better deal.