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No Obamacare? You may face a hefty fine

While the Affordable Care Act has encouraged millions of Americans to sign up for health insurance, many have skipped out on enrolling. Next year, those people may get an unwelcome surprise.

The health law's individual mandate includes a penalty for those who fail to sign up, and the average fine for remaining without coverage in 2016 will jump 47 percent to $969 per household, according to a new analysis from the Kaiser Family Foundation. That marks a significant increase from 2014, or Obamacare's first year, when individuals faced a penalty of just $95 per person, or 1 percent of their income, whichever was higher.

While the government hasn't kept the penalties secret, many Americans may not fully grasp the escalating fines, given the law's complexity. But plenty have already felt the penalty in its first year: 7.5 million taxpayers reported paying up in 2014 for lacking insurance, with an average fine of $200.

"Certainly, people should know about it. Whether they do know about it or not is another question," said Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation. "People have been confused about Obamacare from the start, not just the penalties but the help available to help pay their premiums."

In 2016, the penalty will be either a flat dollar amount of $695 per adult as well as $347.50 per child, or 2.5 percent of family income, whichever is greater. The maximum flat-dollar amount will be $2,085 per family.

That might be enough to encourage many consumers to enroll through a health exchange. After all, a "bronze" plan might cost $0 in premiums, or less than the penalty that about 3.5 million currently uninsured Americans would face, Kaiser said.

"The penalties will be quite substantial in 2016," Levitt said. "The financial incentive is real."

Still, another 7.1 million uninsured Americans will find that the cheapest ACA plan will still cost more than the penalty, Kaiser found. Needless to say, that could sway their decision toward remaining uninsured.

Open enrollment for 2016 began on Nov. 1 and runs through Jan. 31.

Federal officials are trying to get the word out about the increased penalty. Healthcare.gov CEO Kevin Counihan wrote in a blog post that the 2016 penalty may be higher than the annual cost of buying an Obamacare plan.

"Generally, the higher your income, the higher the fee you will have to pay," he wrote. But there are some exemptions from the penalty, such as if you can prove financial hardship.

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