Health Inc.

Fact Check: Could Skipping Insurance Mandate Lead To Jail Time?

Some Republican lawmakers say the Democrats' health overhaul could land uninsured people behind bars, but it's a claim rooted in a rigid reading of the law around tax evasion that seems quite a stretch.

Senate Majority Leader Harry Reid

Rep. Peter Roskam of Illinois waves handcuffs during a floor speech. YouTube hide caption

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The Wall Street Journal reports that House conservatives are saying "people who refuse to buy health insurance could spend five years in prison," an overhaul critique that has also cropped up in the Senate on the eve of its own floor debate. Like an earlier accusation that reform would create government "death panels," the claim doesn't stand up to scrutiny.

During the House debate early this month, Rep. Peter Roskam, R-Ill., said the individual mandate to buy health insurance in the Democrats' plan could mean jail time: "I'm not talking about figurative handcuffs," he added, waving a pair of shiny, police-style manacles as he spoke. "I'm talking about criminal penalties."

What? The House bill would require people to either buy insurance, or face a special 2.5 percent income tax. People who don't buy insurance AND refuse to pay the tax would face the standard punishment for knowingly evading taxes, which is listed in the Internal Revenue Code. By that logic, any change to the tax code could lead to criminal penalties.

People convicted of such crimes "shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution," according to the code.

The Joint Committee on Taxation described the possible penalties in response to a request by Rep. David Camp, R-Mich., for information about how the mandate might be enforced.

It's worth noting that the Senate Finance Committee's version of the bill includes an amendment specifying that no one could be imprisoned or face civil penalties for ignoring the tax.

In any event, imprisonment of tax evaders is usually reserved for the most outrageous cases. The letter to Camp notes that the Internal Revenue Service usually pursues unpaid taxes through the civil process — meaning no jail time. In 2008, fewer than 500 people were incarcerated because of the penalties the Republicans are fretting about.

Weaver is a reporter for Kaiser Health News, a nonprofit news service.



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