TUESDAY JAN 1, 2008 (Foodconsumer.org) -- In Massachusetts, being healthy could be as expensive as being unhealthy.  First, to be healthy, people need to invest time and money to take care of themselves. And secondly healthy people tend not to carry an insurance policy and under the state health insurance law, they will be penalized if they fail to buy a coverage plan.

The state health insurance law, approved in 2006 by lawmakers and signed by former Gov., now presidential candidate Mitt Romney, requires insurance coverage for almost all residents in the state.

The law is designed to force those who are young and healthy and thus tend not to buy health insurance to purchase a health insurance policy.  Under the law, those who do not purchase health insurance are subject to penalties.

In 2007, individuals who failed to carry a policy will lose their $219 personal income tax exemption. Apparently this penalty may not mean too much for most of Mass residents. So in 2008, the penalties will increase drastically in 2008.

Most resident who are uninsured will face monthly fines of as much as $912 for individuals and $1,824 for couples by the end of 2008, according to penalty guidelines released Monday by the Department of Revenue.  The amount of the penalties is about one-third of the lowest cost plants residents need to buy. 

The penalties vary with age and income.  Those who are rich and afford health insurance, but do not purchase any plan will have to receive a higher penalty.

The following are the guidelines released by the Department of Revenue:

Individuals up to the age of 26 with incomes too high to qualify for subsidized health insurance will face a penalty of $672 for an entire year without coverage. People with similar incomes age 27 and over will face a potential annual penalty of $912. Subsidized insurance is available to individuals earning up to $30,636 per year. For a family of four, the threshold is $61,956.

Individuals who meet the income guidelines for subsidized insurance through either the Commonwealth Care program offered by the Health Connector or MassHealth will be penalized based on four income ranges.

Individuals earning up to $15,324 will face no penalty since Commonwealth Care is free for people at this income level. This income cohort represents the largest number of newly insured.
Those earning between $15,325 and $20,424 will face a penalty of $210 per year if they were uninsured the entire year.

For individuals earning between $20,425 and $25,536, the 2008 penalty would be $420 if they were uninsured the entire year.

Individuals earning between $25,537 and $30,636 face a penalty of $630 for the year.

There is no reporting how many residents are uninsured. But some estimate that the number could be anywhere between 370,000 and half a million. Since the law took effect, an estimated 300,000 uninsured people are forced to carry a health insurance policy.

Critics say the near universal health insurance law in Massachusetts virtually imposes a tax on being healthy or a penalty for those who are healthy and do not want a coverage.

For more information, read Draft TIR 07-18: Individual Mandate Penalties for Tax Year 2008.