The Business Section of today’s Sunday Globe runs a quiz to test your knowledge of business news over the past year. Here’s question 1:
1) What penalty will uninsured residents of Massachusetts face if they don’t buy health insurance after July 1?
a. Civil fine of $250.
b. Your children may be placed into foster homes by the Department of Social Services.
c. You will be required to perform community service in a local hospital or community health clinic.
d. You will lose your personal tax deduction for state income tax returns.
We know the Globe thinks the answer is “d”. We suggest the answer should be “none of the above.”
It’s true that beginning 7/1/07, state law requires every resident 18 and over to purchase health insurance. After that, the question is quite misleading.
First, the penalties for non-coverage really only kick in on 12/31/07 — not 7/1/07. Residents filing tax forms for 2007 in the winter/spring of 2008 will have to answer a new question on their tax form. For tax year 2007, the question will be something like: “Did you have health insurance on December 31, 2007?” If the answer is “no,” then the taxpayer loses his or her personal tax exemption (about $200 for an individual). If the answer is “yes,” proof of coverage will be required.
In tax years 2008 and beyond, the penalty gets more serious — 1/2 the cost of the most affordable, approved plan in one’s geographic region. We won’t know what the premium level for the most affordable plan will be until later this year when the Connector Authority gives its “seal of approval” to new “Commonwealth Choice” plans.
This leads to the Second inaccuracy. The penalties will only fall on those for whom the purchase of coverage is deemed “affordable” by the Connector Board — a decision they will make sometime this spring. It is entirely possible there will be entire income categories not included under the mandate’s penalties.
Would have taken a much longer question to provide a realistic question for Globe readers. This is a good example of the challenge we all face explaining this issue to the public over the course of the next year.