There are a number of exemptions available which people haven't talked about, but are very important. Here they are (taken from http://www.irs.gov/uac/Questions-and-Answers-on-the-Individual-Shared-Responsibility-Provision):
Unaffordable Coverage Option (#7)
If you divide $10,681 by 0.08, you'd need to make more than $133,512.50/year to receive a penalty if you decide to forego coverage (8% of $133,512.50 equals $10,681). That means there are a lot of people who will NEVER be faced with a penalty. Of course if you were, you'd just have to fill out the religious exemption section listing something like being a Christian Scientist or other religious organization that does not believe in traditional medicine.
How the IRS Collects the Penalty
Furthermore, the only way the IRS can collect this penalty is via your income tax return. If you don't pay income tax, then it's pretty hard for them to come after you as they are not allowed to garnish wages or freeze bank accounts. The last statistic I heard about the percentage of Americans who don't pay income tax was 47% (see http://abcnews.go.com/Politics/OTUS/mitt-romneys-47-percent-pay-income-taxes/story?id=17263629). So this mandate won't impact almost 1/2 the country.
So, whatever the CBO scores say about the number of people who will pay a penalty, my guess is that it will be much lower than expected.
Heck, if I were a young invincible, I'd happily pay the $95/year to save $2000/year in premium. That would be extra beer money. As I didn't have any assets and low income, there really is nothing for the doctors and hospitals to take from me if I had an illness (BTW, it's already a law that if you show up at the Emergency Room, they must treat you). The challenging part would be if I had expensive medications, but that's easily remedied through programs with the major pharmaceutical companies to supplement the cost to low income people. Then at open enrollment time, I'd sign up for a plan that starts January 1st of the following year. As there are no pre-existing conditions anymore, my conditions would be covered.
Of course if I wanted insurance sooner, I could just marry someone. This is considered a qualified reason (gaining a dependent) which allows me to get the insurance sooner. Once I had the insurance, we could get the marriage annulled (yet another qualified reason).
So why buy health insurance?
Health insurance is important because of the potential of taking your life savings on a major illness (I've seen it numerous times). It also helps give access to the top doctors and hospitals. If the government wants people to buy health insurance, they must focus on the reasons to buy and not on the penalties.
Frankly, there are three kinds of personal insurance coverage needed to protect against catastrophic loss due to health/death. The first is health insurance, the second is life insurance (to keep your beneficiaries living in the same lifestyle instead of having to sell everything), and disability insurance. The most overlooked is disability insurance.
Imagine you had a cash machine in your home. It legally produced $1,000 -- $10,000/week every week of the year. My question is how much would you spend to make sure that income came in every week for the next 10 - 40 years? Would you spend $50/week?, $500/week?, or more to assure it keeps coming in?
If you would spend the money to protect the machine, then disability insurance makes sense. You are that cash machine. If you can't work, the money won't come in and you'll have nothing to live on.
The reason why people go into bankruptcy due to medical debt is because they have no income coming in during the illness. If you don't have money to pay for your premiums (because you are buying food or paying rent), then the policy lapses. Once the policy lapses, you are on the hook for all subsequent expenses.
If you have questions on health reform, need a help with any of the above insurance products (for both individuals and businesses), please give me a call or shoot me an email.