Massachusetts Residents Without Health Insurance Face Steep Fines

For residents of Massachusetts without health insurance, the news certainly isn’t happy. They are going to have to spend more towards paying fines for not owning health insurance. With effect from January 1, 2008, new fine amounts come into effect for those lacking health insurance.

The Department of Revenue has come out with a set of guidelines Monday to determine the penalty to be paid by residents of Massachusetts without health insurance. As per these guidelines, an individual would have to pay as much as $912 by 2008-end if he does not have insurance, while the fine for couples is $1824.

This is a steep increase in penalty compared to the earlier one – as of 2007-end, a person without health insurance were subjected to a loss of personal income tax exemption, a one-time loss that was worth $219.

The new fines are part of a new approach that health care officials are adopting. The intent is to push all residents of Massachusetts into buying health insurance. With this new law, which lawmakers approved and former Massachusetts governor Mitt Romney signed in 2006, officials hope almost the entire state would have health insurance cover.

There is no clear indication of the actual number of people in Massachusetts lacking health insurance coverage. The number could be as high as a few hundred thousand people.

The fines are based on half of the plans with the lowest cost that are available to residents through the Health Care Connector. Various factors influence the fine amount, such as age, annual income, etc. Each passing month that a person remains without health insurance, the fine accumulates. The individual will have to pay the fine as part of his tax returns for 2009.

People who cannot afford health insurance have been spared the fines. They are applicable basically only to those Massachusetts residents who are categorized by the Health Insurance Connector Authority as being able to afford health insurance.

Individuals who are more than 27 years old and earn more than three times the federal poverty level of $30,000 a year face the stiffest penalty, of $76 a month or $912 annually. In the case of married couples, the fine would have to be paid individually if both the people in the marriage are uninsured. A couple earning more than $41,076 per annum would have to pay $1824 per year as penalty.

For younger adults, the fines are not that steep. They are lesser for those individuals who earn less than three times the poverty level. A person earning less than $15,325 per annum is not eligible for any penalty.

While there is no way of knowing how many people in Massachusetts actually come under the purview of the fines, the lawmakers’ version is that over 300,000 Massachusetts residents have signed on for health insurance as a result of the law.