The CBO says that figure includes uninsured dependents for whom the penalty would be paid on their behalf. The CBO and the staff of the Joint Committee on Taxation (JCT) estimate that total collections from those penalties will be about $4 billion per year over the 2017–2019 period.
Among those who are subject to the penalty, many will voluntarily report on their tax returns that they are uninsured and pay the amount owed; however, other individuals will try to avoid making payments, the CBO predicts. Therefore, its estimates account for likely compliance rates, as well as the ability of the Internal Revenue Service (IRS) to administer and collect the penalty.
The CBO and JCT have estimated that about 21 million non-elderly residents will be uninsured in 2016, but the majority of them will not be subject to the penalty. Unauthorized immigrants, for example, are exempted from the mandate to obtain health insurance. Others will have income low enough that they are not required to file an income tax return, be exempt because they are members of Indian tribes, or because the premium they would have to pay would exceed a specified share of their income (initially 8% in 2014 and indexed over time).
Individuals may also be granted waivers from the penalty because of hardship or may be exempted from the mandate on the basis of their religious beliefs.
Beginning in 2014, the Patient Protection and Affordable Care Act, in combination with the Health Care and the Education Reconciliation Act of 2010, requires most residents of the United States to obtain health insurance and imposes a financial penalty for being uninsured. That penalty will be the greater of a flat dollar amount per person that rises to $695 in 2016 and is indexed by inflation thereafter (the penalty for children will be half that amount and an overall cap will apply to family payments) or a percentage of the household’s income that rises to 2.5% for 2016 and subsequent years (also subject to a cap).
The CBO’s report of its estimates is here.