How mandate penalties will be enforced

From the Joint Committee on Taxation:

The penalty is assessed through the Code and accounted for as an additional amount of Federal tax owed. However, it is not subject to the enforcement provisions of subtitle F of the Code. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty. Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay such assessments in a timely manner.

There is much more discussion here and I thank Joe Kristan for the pointer.  Megan McArdle adds comment.  Maybe the legal issues here are not yet clear, but so far it is not looking good.


Leave your comments here.


US taxes are collected almost entirely on the honor system based on putting place automatic collection, thanks to Milton Friedman.

The IRS won't have the means to detect non-compliance given the heavy reliance on State administered Medicaid which requires complex application and approval. And income taxes are collected for taxable relationship groups, not health insurance units. For example, it isn't uncommon for a family to file two or more income tax returns when only one worker's employer plan covers them all.

I am somewhat confused by the wording. Would someone not be prosecuted at all for not paying into the system?

mulp, you are vastly underestimating the opportunity for outrage. Although at this point, finding out that the income stream expected to largely pay for this health care plan is practically unenforceable is hardly a surprise(much like the supposed Medicaid reductions to doctors that will never happen either). And I am disappointed that a large portion of the proposed funding for the healthcare plan is unlikely to be collected. The question is, why aren't you?

I've already heard speculation that by 2014 there will be an iPhone app that will let you purchase health insurance on the way to the hospital.

Of course an efficient ambulance service or emergency care center would either have iPhones and calling plans available to buy or else offer a range of insurance products to begin with - JIT Insurance you might call it .......

Somehow the employment group market for insurance manages to function just fine without any mandates or penalties, beyond the penalty of not having insurance. And the vast majority of workers, even the young and healthy, sign of up for their employers' plan. The main exceptions are people who have better/cheaper coverage through a spouse's plan instead. Why shouldn't this work outside the group market as well?

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