Obamacare Penalty Starts Hitting Taxpayers, Nets Ignore in 91% of Stories

April 9th, 2015 10:09 AM

Surprise! Millions of uninsured Americans could owe Uncle Sam extra this tax season because of Obamacare.

The IRS began penalizing tax filers this year if they failed to purchase insurance in 2014. Obamacare, formally known as the Affordable Care Act (ACA), included an insurance mandate.

Americans must buy qualified health insurance or face the larger of two tax penalty options when they file their 2014 taxes: $95 per adult and $47.50 per child up to $285 per family, or 1 percent of income up to $9,800, according to Kaiser Health News. These penalties are also scheduled to increase dramatically in the following years.

According to the February 18, Washington Post, as many as six million Americans faced the “unwelcome surprise” of a penalty 2015. Of course, many people might not have suffered that shock if the broadcast news networks had discussed the penalty more. But ABC, CBS and NBC evening newscasts failed to mention the tax penalty in 91.1 percent of stories (41 of 45) about the Affordable Care Act between October 1, 2014, and April 5, 2015.

Of the three evening news programs, only CBS Evening News discussed the tax penalty. Neither ABC World News nor NBC Nightly News mentioned the tax penalty on their evening shows during that time. Those shows even passed up easy opportunities to discuss it.

“Tax firms may capitalize on the confusion created by new Obamacare rules in effect for the first time,” NBC’s White House Correspondent Peter Alexander said on January 20. Even though Alexander was talking about Obamacare and new tax rules, he said nothing about tax penalty. Instead, he focused on “extra forms” required for taxpayers receiving health insurance subsidies.

On World News March 4, Senior National Correspondent Jim Avila discussed the lawsuit challenging the legality of Obamacare subsidies that was being considered by the United States Supreme Court.

Avila described the lawsuit as “an effort to kill Obamacare, leaving 7.5 million Americans without health insurance,” but failed to mention the tax penalty imposed by Obamacare on as many as six million people.

Unlike the broadcast networks, print outlets clearly warned of the looming tax penalty.

“As people file their taxes, people who remained uninsured will be hit with penalties,” The New York Times said on February 17. “But awareness remains low among the uninsured, about both signup deadlines and the penalties.”

Indeed, a March 2015 study by consulting firm McKinsey & Company found 41 percent of uninsured individuals unaware of the tax penalty.

Both ABC and NBC also blew past the 2015 insurance coverage open enrollment period, which lasted from November 15, 2014, through February 15, 2015. World News and Nightly News failed to warn individuals that they would face even stiffer penalties the following tax season if they remained uninsured.

For people uninsured in 2015, the tax penalty will soar to $325 per adult and 162.50 per child up to $975 per family, or 2 percent of income, whichever is higher, Kaiser Health News said March 3. Kaiser added that the penalty will go up to $695 per person or 2.5 percent of income for those who were uninsured in 2016 (filing taxes in 2017), then increase based on inflation in following years.

Again, print outlets far outperformed ABC and NBC when it came to reporting the consequences of remaining uninsured.

The Los Angeles Times specifically explained the “federal penalties for being uninsured” in 2015 on November 15, 2014, the very day open enrollment began. The article also supplied specific details about how to enroll through the state health insurance exchange.

On February 12, 2015, The Boston Globe warned in its magazine section that readers that open enrollment would close very soon. It warned the “last chance to apply for Affordable Care Act health insurance in 2015 is closing in.” The article also explicitly described the higher penalties for not enrolling in 2015.

Individuals could have avoided paying the tax penalty this year by enrolling in coverage for 2014. But the broadcast news networks also barely covered the Obamacare tax penalty early last year. They ignored the penalty in 87.5 percent of stories (35 of 40) between January 1, 2014, and April 13, 2014.

During their evening newscasts, ABC, CBS and NBC also ignored the special enrollment period this year for taxpayers who were “confused” about the tax penalty. This extended period, scheduled to last from March 15 through April 30, allowed taxpayers to purchase health insurance and still avoid the tax penalty.

On February 20, 2015, World News anchor David Muir said that “800,000 people received inaccurate [tax] forms” from healthcare.gov, and would have to refile their taxes. But Muir failed to mention about the special enrollment period, which the Obama administration had announced that same day.

The same day, The Washington Post reported that some Democratic politicians had called it “unfair to punish people who weren’t aware of the penalty.”

Conservatives and libertarians also criticized the penalties. The Cato Institute said in a 2011 report that the penalty was illegitimate because it failed “the constitutional requirements for income, excise, or direct taxes.”

The tax penalty was part of the Obamacare’s attempt “to strong-arm individuals into purchasing government-approved health insurance,” The Heritage Foundation said on January 2, 2014.

Even the federal government’s nonpartisan Congressional Budget Office (CBO) said that the tax penalty would primarily impact middle-class Americans, according to The Washington Examiner.

In addition to the tax penalty, Obamacare created or raised at least 12 taxes in addition to the tax penalty, according to Forbes. In a Fact Checker column March 12, 2013, Washington Post reporter Glenn Kessler wrote that “within the 2013 to 2022 budget period, there seems little debate that the health-care law has about $1 trillion in taxes.”

Methodology: MRC Business examined the stories during the evening news shows on ABC, CBS, and NBC from October 1, 2014, through April 5, 2015 that mentioned Obamacare, Affordable Care Act, healthcare, or health care law. This period included the time leading up to the open enrollment period through the end of that period and up to April 5. Of the 45 stories, only four mentioned the tax penalty for failing to purchase insurance.