WASHINGTON — Americans who fail to sign up for a medical plan after health care overhaul takes effect could be hit with fines of up to $3,800, according to a new proposal circulated Tuesday by a senior Democrat. Meanwhile, on the eve of a major health care speech by President Barack Obama, a government health insurance option overwhelmingly favored by progressive Democrats appeared to be losing critically needed support.
Lawmakers returned to Capitol Hill with little sign that many of the difficult issues surrounding a health care overhaul can be easily resolved.
The proposed fines are part of a proposal from Sen. Max Baucus, D-Mont., a moderate who heads the influential Finance Committee. Baucus was meeting Tuesday with a small group of senators trying to engineer a bipartisan compromise to break the stalemate. His plan would guarantee coverage for nearly all Americans at a cost to taxpayers of under $900 billion over 10 years. Some experts consider that a bargain, since the country now spends around $2.5 trillion a year on health care.
The fines would be the stick to enforce a proposed requirement that all Americans get health insurance, much as auto coverage is now mandatory. The penalties would start at $750 a year for individuals, and $1,500 for families. Households making more than three times the federal poverty level — about $66,000 for a family of four — would face the maximum fines. For families, it would be $3,800, and for individuals, $950.
Baucus would offer carrots as well: tax credits to help pay premiums for households making up to three times the poverty level, and for small employers paying about average middle-class wages. People working for companies that offer coverage could avoid the fines by signing up.
But the fines pose a dilemma for Obama. As a candidate, the president campaigned hard against making health insurance a requirement, saying it’s too expensive to mandate. White House officials have since backed away somewhat from that stance, but there’s no indication that Obama would support fines.