Health sign-up cutoff spurs 2nd-chance push

Democrats: Help families avoid fines

WASHINGTON -- The official sign-up season for President Barack Obama's health care law may be over, but leading congressional Democrats say millions of Americans facing new tax penalties deserve a second chance.

Three senior House members strongly urged the administration Monday to grant a special sign-up opportunity for uninsured taxpayers who will be facing fines under the law for the first time this year.

The three are Michigan's Sander Levin, the ranking Democrat on the Ways and Means Committee, and Democratic Reps. Jim McDermott of Washington and Lloyd Doggett of Texas. All worked to help steer Obama's law through rancorous congressional debates from 2009-2010.

The lawmakers say they are concerned that many of their constituents will find out about the penalties after it's already too late for them to sign up for coverage, because open enrollment ended early Monday morning.

That means they could wind up uninsured for another year and owe substantially higher fines in 2016. The fines are collected through the income tax system.

"For the many families who may now be about to pay a penalty, there should be an opportunity to avoid both further penalties and to obtain affordable health insurance," Doggett said.

On the other side of Capitol Hill, a group of senators led by Tammy Baldwin, D-Wis., echoed their House colleagues in asking for a special sign-up period.

"After paying the fee, these individuals may seek to purchase affordable health insurance and avoid a similar fee for 2015, only to discover that the open enrollment window closed on Feb. 15," the senators wrote in a letter to Sylvia Burwell, the secretary of health and human services.

This year is the first time ordinary Americans will experience the complicated interactions between the health care law and taxes. Many of them may not even realize that they owe the money until they file their federal income tax returns. Treasury officials said up to 6 million taxpayers might have to pay such penalties.

Tax returns are due April 15.

The IRS has warned that matters related to health care will make its job harder this filing season and taxpayers should be prepared for long call-center hold times.

"Open enrollment period ended before many Americans filed their taxes," the three House lawmakers said in a statement. "Without a special enrollment period, many people [who will be paying fines] will not have another opportunity to get health coverage this year.

"A special enrollment period will not only help many Americans avoid making an even larger payment next year, but, more importantly, it will help them gain quality health insurance for 2015," the lawmakers added.

So far, administration officials have deflected questions about whether an extension will be granted, saying they welcomed the suggestion and expected to discuss it this month.

Burwell has authority to grant special enrollment periods under certain circumstances.

Supporters of the law say an extension would mainly help low- to middle-income uninsured people, the same group that Obama's coverage expansion was intended to serve. But Republicans may criticize it as another tweak to the Patient Protection and Affordable Care Act.

In addition, providing extra time for enrollment would increase the number of people who received health insurance subsidies and thus had a personal stake in a Supreme Court case challenging payment of the subsidies in more than 30 states.

The White House and its allies said that if the court ruled against the administration, it would cause hardship for many low-income people and chaos in insurance markets around the country. More than eight out of 10 people buying insurance through the public exchanges qualify for financial help.

The health care law imposes fines on uninsured people whose incomes are deemed high enough to enable them to afford coverage. The goal is to broaden the pool of insured people, helping to keep premiums in check for everybody.

The law also offers subsidies to lower the cost of private coverage for people who don't have job-based health care. That financial assistance is provided through a new tax credit.

Although the tax credit subsidies cover most of the premiums for many people, the coverage requirement and the fines that enforce it remain deeply unpopular.

And the cost of being uninsured in the United States is going up significantly.

For 2014, the fine was the greater of $95 per person or 1 percent of household income above the threshold for filing taxes. That fine will be collected when taxpayers file their 2014 returns.

But this year the fine will jump to the greater of 2 percent of income or $325. By 2016, the average fine will be about $1,100, based on government figures.

Polls show that many taxpayers are unaware of the potential financial exposure.

Floyd Cable, a real estate agent from Wichita Falls, Texas, said the escalating fines were part of the motivation for him and his wife to sign up last week. Both are self-employed, and stretching to pay health insurance premiums has been a struggle.

"We have been going without insurance the last couple of years just because the rates are so astronomical," Cable said.

But they were also concerned they could wind up on the wrong side of rising penalties. And, being in his early 60s, Cable said he recognizes the value of having health insurance against unexpected illness.

An extension would probably help people still on the fence, like he was.

"Anything that could be done to give people more time to sort through this, is not only a good move for the administration, but just makes common sense," Cable said.

Since both the subsidies and penalties under the health law are administered through the tax system, some experts have urged the Obama administration to permanently schedule sign-up season to overlap with tax-filing season.

More than 10 million people selected or were assigned to health plans in the latest enrollment period. Federal officials reported a final surge over the weekend, with more than 60,000 people using HealthCare.gov at times Sunday.

Information for this article was contributed by Ricardo Alonso-Zaldivar of The Associated Press and by Robert Pear of The New York Times.

A Section on 02/17/2015

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