ObamaCare’s impact on health costs.

Janice Riddle got a nasty surprise when she filled out her tax return this year.

The Los Angeles resident had applied for Obamacare in late 2013, when she was unemployed. She qualified for a hefty subsidy of $470 a month, leaving her with a monthly premium of $1 for the cheapest plan available.

Riddle landed a job in early 2014 at a life insurance agency, but since her new employer didn’t offer health benefits, she kept her Obamacare plan. However, she didn’t update her income with the California exchange, which she acknowledges was her mistake.

Approaching ObamaCare With Humility
Washington can’t get out of Its own way on health care. Give states a chance.
President Obama spoke frequently of humility during last week’s prayer breakfast. Congressional Republicans could use a healthy measure of that virtue should the Supreme Court rule that ObamaCare subsidies are not available in the 37 states with federally-facilitated exchanges.
ObamaCare is the product of a yawning humility deficit. Its core conceit is that a group of very smart and ideologically like-minded people could reorganize the financing of a $3 trillion industry that touches the lives of 320 million Americans.
Its architects boast that more people have “selected a plan” this time around than during the program’s disastrous initial open season. They are quick to overlook the law’s wreckage – canceled policies, loss of employer-sponsored coverage, erroneous subsidies that will require people of modest means to repay the government with interest, and assorted other disruptions and deformations.
A law that is minutely prescriptive too often got its prescriptions horribly wrong. Its flaws will reach the point of absurdity should the Supreme Court rule that its attempt to subsidize health insurance made most health insurance subsidies illegal.
The case of King v. Burwell would be a simple one, but for its social and political implications. The Court is examining a defect in the law, one of many in what is perhaps the most poorly drafted statute in U.S. history. The provision in question provides that subsidized health insurance coverage is available only through an exchange “established by the state.”
The IRS effectively rewrote the law to allow subsidies to be paid as well through the 37 exchanges that were not “established by the state,” but by the federal government. In defending the agency, the Justice Department in essence argues that the IRS can change laws so that they conform to what Congress must surely have meant to write, rather than what they actually wrote.
The Court should instead base its ruling on the bedrock principle that only Congress has constitutional warrant to correct its own legislative blunders. If it does, health insurance subsidies will no longer be available to millions of people who live in states with federal exchanges, presenting 37 Governors with a stark choice between two unpalatable options: submit to ObamaCare’s flawed framework by establishing state exchanges or let their constituents forfeit subsidized coverage.
Democrats will pressure Governors to establish such exchanges while also pushing Congressional legislation to authorize the provision of subsidies through federal exchanges. Republicans are floating alternative proposals that would subsidize coverage for low-income people and those with pre-existing conditions, while stripping ObamaCare of mandates and relaxing some of its other requirements.
These proposals will meet with criticism, some of it justified. Getting the right subsidy in the right amount to the right person (or the right insurance company) on a monthly basis is tricky business. The Administration had 3-1/2 years from the law’s enactment to the launch of the exchanges to get it right. They didn’t. Erecting an alternative federally administered system in a matter of months would risk a similar fate.
Perhaps what is needed is not an alternative national system at all. ObamaCare’s serial pratfalls have led millions to question the federal government’s capacity to administer the law. A judicial smackdown five years after the law’s enactment will reinforce the view that Washington can’t get out of its own way on health care.
Republicans should embrace this sentiment and argue that health care is too important to be entrusted to the people who brought us ObamaCare. They should advocate that Governors be empowered to advance alternative ways of expanding coverage, springing them from ObamaCare’s take-it-or-leave-it trap.
Congressional Republicans could accomplish this by advancing a bill to provide capitated allotments to states that would be based on the amount of refundable tax credits that its residents received during 2014. To qualify for an allotment, a state would be required to develop a plan for providing affordable coverage to low-income residents and those with pre-existing conditions. Each state would decide how best to achieve these objectives, with the results subject to rigorous evaluation.
States that already have set up exchanges could keep them and those that have not could still establish them. But they also could instead choose to be freed from ObamaCare’s one-size-fits-all rigidities by opting to receive allotments. These allotments would provide the resources to launch innovative and effective alternatives to ObamaCare tailored to their state’s unique characteristics. If some states institute defective regimes, the damage would at least be quarantined and not induce national contagion.
Resisting the temptation to develop comprehensive national legislation will prove no easier for Republicans than it has been for Democrats. But if ObamaCare has taught us anything, it is that the good intentions behind sweeping legislation are often overcome by unintended consequences. The humility that might engender perhaps will make them think twice about devising a national regime of health insurance subsidies and instead give each state the opportunity to fashion programs best suited to their circumstances.

By Tom Miller and Grace-Marie Turner

One of the mechanisms through which the Affordable Care Act (ACA) expands access to health insurance is through tax subsidies provided to individuals to help offset the cost of health insurance. These subsidies are only available if people purchase highly-regulated and -mandated policies that are sold only through government-run insurance exchanges.

The law’s formula for determining the amount of these premium subsidies specifies that people are eligible for them if they are enrolled in qualified plans offered in “an Exchange established by the State under [section] 1311 of the Patient Protection and Affordable Care Act.” However, only 13 states are operating state-based exchanges this year. The rest are relying on exchanges created by the federal government. In 2012, the IRS wrote a rule that allows the subsidies to flow through the federal exchanges as well.

The Supreme Court has agreed to hear a case, King v Burwell, challenging the illegal IRS rule which, despite statutory language to the contrary, authorizes people to get subsidies in the federal exchanges. Petitioners argue that the law clearly restricts the subsidies to state exchanges; that this gives states an incentive to create their own exchanges; and that administrative agencies like the IRS cannot alter legislation without statutory authorization by Congress. Respondents say that “established by the State” is at worst a drafting error, not a reflection of legislators’ intent, and that Congress wanted subsidies to be available to citizens in all of the states.

The Supreme Court justices will hear oral arguments in the case on March 4, and the justices will privately cast their initial votes soon afterward on whether they believe the law allows the subsidies in the federal exchanges. If the justices decide that the IRS acted illegally in opening federal exchanges to subsidies, citizens in states that have defaulted to the federally-created exchanges soon would be ineligible for the subsidies. As a result, most would begin to face the full cost of the unsubsidized premiums on their policies and would be more likely to drop their health insurance coverage.

The Obama administration’s goal is to enroll 9.1 million people in health insurance this year in the 37 states where it is operating federally-facilitated exchanges. Because an estimated 87 percent of people enrolled are receiving taxpayer subsidies for their coverage, that means up to 7.9 million people could be impacted by the decision.

Many court watchers believe the King v Burwell decision could hinge on whether or not Congress has a viable plan to provide for alternative, if not continued, coverage for them.

Many leaders in Congress recognize the court needs to be reassured that legislators have a plan to address this issue. As a result, efforts are underway for Congress to develop legislation that would create a transition path to other types of subsidized coverage, particularly a safety net for lower-income individuals currently covered by policies in federal-exchange states. The legislation should not only take care of people who are at risk of losing their current coverage, but also use this as an opportunity to begin to move our system toward a more competitive market, centered around individual choice.

The congressional proposals for a short-term safety net and a longer term transition to better choices exist primarily in draft form so far. Most would aim to hold people in federal exchanges harmless going forward and provide an extension of their current coverage through the end of the current plan year. Returning power to the states to regulate their health insurance markets also is important so that people could choose health insurance plans approved by the states, rather than the highly-mandated and regulated policies available on and off the exchanges. Proposals also would remove mandates for individuals to purchase and employers to offer policies.

There is general agreement among most critics of the Affordable Care Act that its federal-exchange-based subsidies would have to be replaced to various degrees, but there are two primary schools of thought about how to deliver the subsidies in a different manner: Either through new and much-less-restrictive federal tax credits to individuals for purchasing insurance; or through allocations to the states to distribute through existing mechanisms, such as the Children’s Health Insurance Program.

The public relations wars over the pending Supreme Court decision already have begun: Families USA is leading the effort on the left and will try to show how many people would be harmed if the subsidies are struck down. Supporters of free-markets and limited government also are mounting a serious media outreach effort to show the harm that this law is doing, including the soaring cost of health insurance, the threat of mandate penalties, labor market disincentives, the disruptions in previous coverage, and patients’ reduced access to their preferred medical providers. Critics of the IRS rule and its federal exchange subsidies need to explain very clearly that Congress is ready and willing to act to help people who would lose their coverage if the Supreme Court decides not to allow subsidies in the federal exchanges.

The Consequences of Doing Nothing

Absent any further actions by Congress, here is an overview of the immediate effects of a decision in favor of the petitioners:

Primary effects:
•People will lose federal premium assistance tax subsidies in exchanges not established by a state.
•The employer mandate cannot be enforced in federal exchange states, and
•Fewer Americans will be subject to the individual mandate.

Secondary, ripple effects involve:
•The effective reach of ACA’s federally-required insurance regulation is reduced.
•The level of continuing and subsequent insurer and enrollee participation in ACA exchanges declines.
•Future coverage in unsubsidized or less-subsidized federal exchanges will be repriced.
•The fiscal limits of the ACA’s risk corridor and reinsurance provisions will be reached sooner.
•States will face renewed pressure to expand Medicaid coverage more aggressively.

•Pro-ACA policymakers will explore new efforts to redefine and revise the parameters of “state-established” exchanges.

Primary effects:

Subsidies: If the Supreme Court rules that the IRS acted illegally, the government’s authority to distribute tax subsidies through federal exchanges will end within a month, assuming no new action by Congress. States that created their own exchanges will be able to continue to operate and distribute subsidies, and other states may consider qualifying as a state exchange after a King ruling.

The federal exchanges, also called federally-facilitated marketplaces (FFMs), could continue to operate, but the expensive insurance sold there would be much less attractive to customers who are no longer receiving federal tax subsidies. Barring further congressional action shortly after a Court decision against the IRS rule, insurers would no longer benefit from those unauthorized tax subsidies for the rest of 2015 and beyond.

Employer mandate: In states that have not established their own state exchanges as specified under Section 1311 of the law, the federal government will effectively be unable to impose any employer-mandate penalties on employers in that state. That is because the penalties are only triggered in the event that an employer fails to comply with the mandate to provide qualified and affordable coverage and also has at least one of its employees lacking such coverage who subsequently receives federally-subsidized coverage through the exchange in that state. (Employers may violate the mandate either by not offering ANY qualified coverage to their workers, or by offering unaffordable policies to one or more of their employees. Qualified coverage involves the employer offering an insurance plan that provides at least minimum essential benefits and the employer also paying for at least 60 percent of the benefits covered by that plan. Unaffordable coverage involves policies in which premium expenses cost an employee more than 9.5 percent of his or her W-2 wage income.)

Individual mandate: Individuals in states without a section 1311 exchange also will face higher income thresholds before the individual mandate could apply to them. The individual mandate does not apply if available coverage costs more than 8 percent of one’s household income. The lack of subsidies will drive up the net cost of coverage. As a result, individuals in states that don’t establish exchanges will face higher income thresholds before the mandate can apply to them. If these subsidies are no longer available in a state after the King decision, the out-of-pocket premium costs for coverage become more expensive and less affordable for unsubsidized individuals. Therefore, they are less likely to bring those individuals within reach of the individual mandate penalties. So, a favorable ruling in King won’t totally eliminate the individual mandate, but it will exempt more lower-income Americans from its penalties.

Ripple effects:

There will be numerous indirect effects as well.

Participation by individuals, employers, and insurance companies:

Absent an enforceable employer mandate, along with a more limited individual mandate and less of a “captive” population in federal, unsubsidized exchanges, the ACA’s other insurance rules will be weakened as well. In states that don’t run exchanges, employers couldn’t be penalized any longer for offering non-qualified coverage. Fewer individuals have to, or will want to, buy ACA-prescribed coverage.

Without the federal exchange subsidies, more insurers will decide to drop out of participating in states with federal exchanges, and the insurers will face less attractive operating cost margins: They will have fewer enrollees, arguably skewed toward higher-risk patients who lack other coverage alternatives.

Risk payments: The business assumptions behind participating in federally-facilitated exchanges would change so much for insurance companies post-King that insurers’ losses in those states in subsequent months and years would increase and add to the claims against ACA’s risk corridor funds. This would accelerate pressure to resolve the issue of whether those risk corridor payments are meant to be budget neutral, that is, payments for losses can be no greater than payments collected from more profitable exchange insurers going forward.

Countermoves in this environment by state and federal officials wanting to keep the ACA coverage afloat are likely to include broader definitions of Medicaid coverage (with states agreeing to the ACA’s Medicaid expansion and possibly submitting waivers to cover people above the current 138 percent FPL ceilings authorized by the ACA). Officials also may get clever with the definition of a state-established exchange, for example by renting the federal exchange website mechanisms, contracting out to piggyback on other state exchanges, revising current regulations for what constitutes a section 1311 exchange, etc.

In summary, there will be costs and benefits that differ among various parties in the event of a Supreme Court decision against the IRS rule and current federal exchange tax subsidies. Members of Congress and state officials must not simply default into restoring the current law’s many costs and regulatory burdens. Instead, they need to prepare now to take advantage of the opportunities that will be available to them to improve our health sector and the choices of coverage available to consumers if the Supreme Court rules against subsidies on federal exchanges.

Miller is a resident fellow at the American Enterprise Institute. Turner is president of the Galen Institute.

Millions of Americans who received subsidized health insurance under ObamaCare will find a new wave of frustration this tax season.

After losing their health insurance because it was not ObamaCare compliant…after slogging through the healthcare.gov website to get enrolled in a new policy…after losing their doctors…after learning that they must pay thousands of dollars in deductibles before they can get medical care…now they must face the IRS.

By the end of the month, they should receive a form 1095-A that shows they had health insurance through federal or state exchanges. They will use the form to fill out an astonishingly complex Form 8962 to reconcile the subsidies they received with the income they earned in 2014.

If they received too much, they will have to pay back some or all of the subsidy. That could mean they receive a smaller – or no – tax refund. And for the privilege of this new interaction with the IRS, many will have to pay hundreds of dollars to hire a tax preparer to help them wade through these new ObamaCare tax forms.

Yes, ObamaCare is getting worse.

H&R Block HRB 0% estimates that up to half of Americans who received subsidies for health insurance under the ACA last year will owe the IRS money.

An estimated 87% of those who signed up for health insurance on the new exchanges got subsidies to reduce their health insurance premiums and sometimes their cost-sharing expenses. An assistant professor of health policy at Vanderbilt University, John Graves, calculates the average subsidy was $208 too high.

But these taxpayers face yet another cost. Many of them are accustomed to filing the simple 1040EZ tax form. No more. Most will have to retain tax preparers to help them fill out the new Form 8962. That could cost them several hundred dollars.

The form is used for taxpayers to prove that they and everyone in their family (including children) had health insurance every month of last year, what their incomes were, how much of a subsidy they received, whether they are married, single, legally separated, etc. The examples in the instructions are a window into the complexity of family arrangements in America and, still, people surely will come up with hundreds more permutations.

The instructions are mindboggling in their complexity. They take up 15 pages of fine print and will challenge the most seasoned tax preparer. A one-sentence example: “Column B. Enter on lines 12 through 23, column B, the amount of the monthly premium for the applicable SLCSP [second lowest cost silver plan] reported on Form 1095-A, lines 21 through 32, column B.”

It continues, “If during 2014, your coverage family changes and you did not notify the Marketplace, or no APTC [Advance payments of the premium tax credit] was paid, the premium for the applicable SLCSP reported on your form(s) 1095-A may not be accurate…” It then provides a handy link to another IRS document to explain what you should do if that happens. The instructions go on and on like that for 15 pages.

If taxpayers have to pay back some or all of the subsidy, the instructions explain a new layer of complexity: People who make less than 200% of poverty, or about $23,000 for an individual, will owe only $300, even if they received thousands of dollars more in subsidies. If you make up to the 400% of poverty, or $46,000, you could owe $1,250. If you earned $46,500, which is just over the limit to qualify for subsidies, you will have to pay it all back – likely several thousand dollars.

And if you didn’t have health insurance last year, you will have to pay a fine of $95 or 1% of your modified adjusted gross income. A couple making $65,000 would have to pay a fine of about $450, for example. The “tax penalties” increase this year and next.

Can it get any worse? Yes.

Nina Olson, an IRS watchdog, estimates that 47% of those calling the IRS for help in filling out their tax returns won’t get their calls answered during tax filing season. Those who do get through will wait an average of 34 minutes to talk to someone, she estimates.

Tax preparers calling the “priority service line” will have to wait an estimated 52 minutes to talk to an IRS expert. IRS Commissioner John Koskinen admitted, “We do as well as we can. And ‘as well as we can’ is still going to be miserable.”

The vast majority of Americans who did not receive ObamaCare subsidies for health insurance will simply have to check a box on their regular tax form attesting that they had health insurance. Employers and health insurance companies will be sending them a form 1095-B or 1095-C, which they will attach to their taxes as proof of coverage.

The individual mandate is one of the most detested provisions in the health law, and the first tax season when people must comply will create a new level of outrage about the law, its intrusiveness, and the hidden costs in fines and hidden taxes that millions of Americans will face.

The Galen Institute today released an updated version of its list of significant changes made to the Affordable Care Act by the Obama administration, the Congress, and the U.S. Supreme Court since the law was passed in March of 2010. Today’s list includes four additional changes made by the Obama administration, most of them contrary to statutory language. By our count, more than 46 significant changes have been made to the law: at least 28 that the administration has made unilaterally, 16 that Congress has passed and the president has signed, and 2 by the Supreme Court. Here are the latest additions:
•Bay State Bailout: More than 300,000 people in Massachusetts gained temporary Medicaid coverage in 2014 without any verification of their eligibility, with the Obama and Patrick administrations using a taxpayer-funded bailout to mask the failure of the commonwealth’s disastrously malfunctioning website. (January 2014)
•Failure to enforce abortion restrictions: A GAO report found that many exchange insurance plans don’t separate charges for abortion services as required by the ACA, showing that the administration is not enforcing the law. In 2014, abortions were being financed with taxpayer funds in more than 1,000 exchange plans. (Sept. 16, 2014)
•Risk Corridor coverage: The Obama administration plans to illegally distribute risk corridor payments to insurers, despite studies by both the Congressional Research Service and the GAO saying a congressional appropriation is required before federal agencies can make the payments. (Sept. 30, 2014)
•Transparency of coverage: CMS delays statutory requirements on insurance companies to disclose data on the number of people enrolled, disenrollment, number of claims denied, costs to consumers of certain services, etc. (Oct. 20, 2014)

By Tom Miller & Grace-Marie Turner
Tax subsidies are one of the mechanisms through which the Affordable Care Act expands access to health insurance. These subsidies are available only to those who purchase highly regulated policies through government-run exchanges, and are allocated on a monthly basis to insurance companies to offset the costs of premiums and sometimes out-of-pocket costs.

The law’s formula for determining the amount of these premium subsidies specifies that people are eligible for them if they are enrolled in qualified plans offered in “an Exchange established by the State under [section] 1311 of the Patient Protection and Affordable Care Act.” Only 13 states are operating such exchanges this year. The rest are relying on exchanges created by the federal government. But in 2012, the IRS wrote a rule that allows the subsidies to flow through the federal exchanges as well. About 6 million people were enrolled on the federally run exchanges after open enrollment closed for the 2014 plan year, about 85 percent of whom received the subsidies.

The Supreme Court has agreed to hear a case, King v. Burwell, challenging the IRS rule. Plaintiffs argue that the law clearly restricts the subsidies to state exchanges, that this gives states an incentive to create their own exchanges, and that administrative agencies like the IRS cannot alter legislation or spend taxpayer dollars without statutory authorization by Congress. Defendants say that “established by the State” is at worst a drafting error, not a reflection of legislators’ intent, and that Congress wanted subsidies to be available in all of the states.

Will Congress Act?
The Supreme Court justices will hear oral arguments in the case on March 4. If the justices decide that the IRS acted illegally, residents of as many as 37 states soon will become ineligible for the subsidies. As a result, most will begin to face the full cost of the unsubsidized premiums on their policies and will be more likely to drop their coverage.

Many court watchers believe the decision could hinge on whether Congress has a viable plan to provide for alternative, if not continued, coverage for these millions of people. As a result, efforts are underway to develop legislation to transition those on the federal exchanges — especially lower-income individuals — to other types of subsidized coverage. The legislation should not only take care of people who are at risk of losing their current coverage, but also take the opportunity to move our system toward a more competitive market, centered around individual choice.

The congressional proposals exist primarily in draft form so far. Most aim to hold people in federal exchanges harmless going forward, providing an extension of their current coverage through the end of the current plan year. Most also would give people a much greater range of health-insurance options, while removing federal regulations and mandates for individuals to purchase or for employers to offer policies.

There is general agreement that Congress will need to act to provide assistance to the roughly 5 million people who would lose their subsidies as a result of the court decision. There are two schools of thought about how to do this: either through new, less restrictive federal tax credits to individuals; or through allocations to the states to distribute through other mechanisms, such as those used for the Children’s Health Insurance Program.

The public-relations wars over the pending Supreme Court decision already have begun: Families USA is leading the effort on the left and will try to show how many people will be harmed if the subsidies are struck down. Supporters of free markets and limited government are mounting their own serious media-outreach effort to show the harm that this law is doing, emphasizing the soaring cost of health insurance, the threat of mandate penalties, the labor-market disincentives, the disruptions in previous coverage, and patients’ reduced access to their preferred medical providers. Critics of the IRS rule need to explain very clearly that Congress is ready and willing to act to take care of the people who will lose their coverage if the Supreme Court decides not to allow subsidies on the federal exchanges.

The Consequences of Doing Nothing
If the Supreme Court rules that the IRS acted illegally, the government’s authority to distribute tax subsidies through federal exchanges will end within a month, assuming no new action by Congress. These exchanges can continue to operate, but the expensive insurance sold there will be much less attractive to customers without tax subsidies. States that created their own exchanges will be able to continue to operate and distribute subsidies, and other states may consider qualifying as a state exchange after a King ruling.

In states that have not established their own exchanges, the federal government will effectively be unable to impose any employer-mandate penalties. That is because the penalties are triggered when someone without access to employer-based coverage receives subsidized coverage on an exchange.

The individual mandate will take a blow as well. The mandate does not apply if the lowest-priced coverage available costs more than 8 percent of one’s household income, and the lack of subsidies will drive up the net cost of coverage. So, individuals in states that don’t establish exchanges will face higher income thresholds before the mandate can apply to them.

There will be numerous indirect effects as well. With both the employer and individual mandates weakened, the ACA’s other insurance rules will be weakened too. In states that don’t run exchanges, employers won’t be penalized for offering non-qualified coverage, and fewer individuals will have to, or will want to, buy ACA-prescribed coverage.

Insurers on the federal exchanges, meanwhile, will have fewer enrollees, likely skewed toward higher-risk patients who lack other coverage options. Many insurers could drop out, and losses for those that remain will add to the claims against ACA’s “risk corridor” funds. This would accelerate pressure to resolve the issue of whether these payments are meant to be budget-neutral — that is, payments for losses can be no greater than payments collected from more profitable exchange insurers going forward..

Countermoves by state and federal officials wanting to keep ACA coverage afloat are likely to include changes to Medicaid coverage, with more states agreeing to the law’s Medicaid expansion and possibly seeking federal waivers to cover people above the current income ceiling (138 percent of the federal poverty level). Officials also may get clever with the definition of a state-established exchange, for example by renting the federal exchange website mechanisms, contracting out to piggyback on other state exchanges, revising federal regulations for what constitutes a section 1311 exchange, etc.

Members of Congress and state officials must not simply restore the current law’s many costs and regulatory burdens. Instead, they need to prepare now to take advantage of the opportunities that will be available to them to improve our health sector and the choices of coverage available to consumers if the Supreme Court rules against subsidies on federal exchanges.

Tom Miller is a resident fellow at the American Enterprise Institute. Grace-Marie Turner is president of the Galen Institute.

WHEN Karen Pineman of Manhattan received notice that her longtime health insurance policy didn’t comply with the Affordable Care Act’s requirements, she gamely set about shopping for a new policy through the public marketplace. After all, she’d supported President Obama and the act as a matter of principle.

Ms. Pineman, who is self-employed, accepted that she’d have to pay higher premiums for a plan with a narrower provider network and no out-of-network coverage. She accepted that she’d have to pay out of pocket to see her primary care physician, who didn’t participate. She even accepted having co-pays of nearly $1,800 to have a cast put on her ankle in an emergency room after she broke it while playing tennis.

WASHINGTON — Obama administration officials and other supporters of the Affordable Care Act say they worry that the tax-filing season will generate new anger as uninsured consumers learn that they must pay tax penalties and as many people struggle with complex forms needed to justify tax credits they received in 2014 to pay for health insurance.

The White House has already granted some exemptions and is considering more to avoid a political firestorm.

Some 3 million to 6 million Americans will have to pay an Obamacare tax penalty for not having health insurance last year, Treasury officials said Wednesday. It’s the first time they have given estimates for how many people will be subject to a fine.

The penalty is $95, or 1% of income above a certain threshold (roughly $20,000 for a couple). So you could end up owing the IRS a lot of money.

A nonpartisan entity of the federal government has found that the Affordable Care Act will cost the government less than expected. However, the reduction in the law’s price tag comes among findings that millions of Americans could lose their employer-provided health insurance.

The Congressional Budget Office came out with a report yesterday revising the costs and budgetary effects of the Affordable Care Act, also known as Obamacare.