Enrollment opened November 1 and runs through Dec. 15 for individual health insurance plans subsidized through the Affordable Care Act. Credit: Gabor Degre

Maine has one of the highest rates of health insurance in the nation, with only about 7 percent of the population lacking coverage. But at the same time, many Mainers have paid the federal tax penalty, established under the “individual mandate” provision of the Affordable Care Act, for having no insurance.

According to IRS data, more than 34,000 Maine tax filers paid nearly $15.5 million in the ACA tax penalty in 2015, the most recent year for which the data are available. That’s about 5.25 percent of all tax filers in the state that year, a high share compared to other states.

Nationwide, 4.5 percent of all tax filers paid the penalty in 2015, according to a recent report in the New York Times.

Most states with large percentages of residents paying the ACA penalty, such as Texas, Alaska and Florida, also have high percentages of uninsured residents, which stands to reason.

But Maine, where comparatively few lack insurance, is an outlier.

Is it a misunderstanding about the requirements of the law? A failure of marketing? A political statement? Or plain old Yankee cussedness?

Trish Riley, executive director of the National Academy for State Health Policy, said it could be any or all of the above. But, she cautioned, 2015 was the first full year of ACA-generated data. American consumers, insurers and tax experts were just coming to terms with the program and its complexities, including the penalty for not having health coverage.

“This is just a baseline,” she said of the Times data. “Things have gotten a lot better. 2015 was a long time ago in ACA-land.”

From 2003 to 2011, Riley headed the Office of Health Policy and Finance in Maine, under then-Gov. John Baldacci.

Low rates of uninsured

“It’s a complicated question,” Mitchell Stein, an independent health policy consultant who advocates for expanding access to care, said. “There are unique issues in Maine that push us in several different directions at once.”

Maine’s success in covering its residents dates back to the days of the Dirigo Health Reform Act of 2003, he said, when Baldacci signed into law a number of provisions to expand health care access and improve the quality of care in Maine, including a subsidized insurance plan known as DirigoChoice.

“Dirigo kind of disappeared with [the coming of] the ACA,” Stein said. “But there was this whole group of people in Maine who were primed for this kind of set-up.”

He also credits the Maine Health Access Foundation’s statewide ACA marketing campaign, called Enroll207.

Also, Stein said, the founding of Community Health Options, a Lewiston-based insurance cooperative that offers a range of health plans on the marketplace, provided Mainers with an important alternative to commercial insurance plans. For 2018, nonprofit Harvard Pilgrim Health Care is the only other insurer selling plans through the marketplace in Maine.

“Maine is a small state, and a communal state,” Stein said, “so all these people who were involved [in the success of the ACA] knew each other and came together to make it work.”

Still, he said, especially in the least-populated areas of the state, the ACA and its complexities remain a bit of a mystery, possibly reflected in higher rates of penalty-filing from those far-flung areas.

The average payment in Maine was about $455 in 2015, in keeping with the national average that year of $462. The penalty is calculated using income and the average cost of health premiums. In 2015, the minimum payment for a single adult was $325 and the maximum was $2,676. The figures have increased over time, and in 2017 the average penalty was estimated at $708.

Stein pointed out that for 2018, a subsidized, basic-benefit “Bronze” plan can cost almost nothing — or in a surprising number of cases, literally nothing. “I wonder if people know that,” he said.

And, he said, in low-income households where the lowest subsidized monthly premium costs more than 8 percent of income, the tax penalty for not having insurance is waived.

“I can’t prove it,” Stein said, “but many of the people paying the penalty in Maine may be doing so mistakenly.”

Paying the penalty

“The word ‘affordable’ has a specific meaning in the ACA, but it’s a relative term for everyone else,” Joel Allumbaugh, a Maine-based employee benefits broker and a senior fellow with the conservative Foundation for Government Accountability, said.

Allumbaugh said that despite good-faith efforts to promote ACA plans, many Mainers still feel they cannot afford even the cheapest available option and choose to pay the penalty instead. Or, independent-minded Mainers may be ideologically opposed to the taxpayer-subsidized program and protest it by not enrolling.

Allumbaugh said that though an employer may offer coverage to a middle-wage worker, the expense of adding a spouse and dependents often proves unaffordable.

“I’d love to see how many people who pay that penalty are family members of a person who has coverage,” he said.

Many Mainers find the process of signing up for coverage and reporting it on their tax forms confusing, Allumbaugh said.

“It can be cumbersome and complicated, with a lot of ambiguity,” he said.

For some, confusion reigns

At the H&R Block tax preparation assistance office in Bucksport, owner Catherine Hope said many of her clients are confused about the ACA reporting requirements and the tax penalty, even those with employer-sponsored insurance.

People who buy a subsidized plan on the individual marketplace themselves, without the benefit of a trained assistant, are especially likely to file incorrectly.

“It gets really messed up,” she said. “A lot of different things can happen.”

The Times reported that about. 6.1 million tax filers paid the ACA penalty — officially known at the Internal Revenue Service as the “health care individual responsibility payment” — in tax year 2015, a significant decrease from the 2014 number of 8.1 million.

In 2015 and early 2016, the IRS sent letters to almost 319,000 taxpayers who may have unnecessarily paid the penalty, in order to help them amend their 2014 taxes, according to the report.

To complicate things further, the IRS announced in February that it will no longer reject electronically filed “silent returns” — those that do not provide required information about health coverage. That’s in response to an executive order issued in January by President Donald Trump that all federal agencies with responsibilities under the ACA “waive, defer, grant exemptions from, or delay the implementation of any requirement of the Act that would impose burden.”

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Meg Haskell

Meg Haskell is a curious second-career journalist with two grown sons, a background in health care and a penchant for new experiences. She lives in Stockton Springs. Email her at mhaskell@bangordailynews.com.