Obamacare loopholes mean less money for government

President Barack Obama
Jim Watson | AFP | Getty Images

Four million people who are expected to be in violation of Obamacare's mandate to obtain health insurance are projected to pay $4.2 billion in tax penalties in 2016, according to new government estimates.

That penalty total is $3 billion less than an earlier estimate, according to a report issued by the Congressional Budget Office.

The steep drop is due to the fact that 2 million fewer people are now expected to pay the penalty, largely because more people are expected to receive exemptions.

The CBO and the Joint Committee on Taxation also now estimate that the government will collect an estimated average of $5 billion per year from 2017 through 2024 from uninsured Americans in Obamacare penalties. From 2015 to 2024, the CBO report said, a total of $46 billion in Obamacare penalty payments are projected to be collected.

Chipping away at Obamacare
Chipping away at Obamacare

The penalties for failure to have coverage as of 2014 start being collected during tax filing season in 2015. CBO estimated $2 billion in penalties will be collected by the government from uninsured people who didn't have coverage in 2014.

CBO's projections underscore the fact that the vast majority—more than 85 percent—of the estimated 30 million people will still lack insurance in 2016 will not have to pay a penalty for violating the so-called individual mandate under Obamacare.

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The Affordable Care Act, as of this year, mandates that most legal residents have some form of health insurance or pay a penalty. That penalty this year is either $95 per adult, or 1 percent of their household's taxable income, whichever is higher.

The penalty rises in 2016 to $695 per adult or 2.5 percent of household income. The penalty is indexed to inflation in years after that.

But there are a slew of exemptions for that penalty.

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People who won't have to pay the Obamacare fine include unauthorized immigrants, people whose income is so low they don't have to file income tax returns, incarcerated people, members of Indian tribes and people whose insurance premiums would exceed a certain share of their incomes, starting at 8 percent in 2014.

Also exempt from the penalty will be people whose incomes are less than 138 percent of the federal poverty line who live in states that have not expanded eligibility requirements for Medicaid under Obamacare. The federal government has estimated that will apply to more than 5 million people in the 24 states that currently are not moving toward expanding Medicaid eligibility.

Data discrepancies with Obamacare signups: Sources
Data discrepancies with Obamacare signups: Sources

The CBO report noted that an estimated 23 million people will have one or more of those exemptions.

And some of the remaining 7 million people will be granted exemptions "because of hardship or for other reasons," the CBO report said.

The 4 million people the CBO estimates will end up paying the penalty include uninsured dependents whose penalty will be paid by their parents or guardian.

Read MoreData discrepancies in health signups affect 2M

People whose taxable income exceeds 400 percent of the poverty line, or $48,600 per year by 2016, will comprise the largest single group of payers, and will account for the majority of the penalties collected, according to the report.

That group in 2016 will comprise 31 percent of the penalty payers, and make an estimated $2.5 billion in payments, or 61 percent of the total.

The CBO noted that, generally speaking, households with lower incomes will be more likely to pay a flat dollar penalty, while higher-income households will pay a percentage of their taxable income.

Under Obamacare, people who earn between 100 to 400 percent of the federal poverty level are eligible for subsidies to reduce the cost of premiums for health insurance plans sold on government-run exchanges, such as the federally run HealthCare.gov, or a state-operated marketplace.

Number of uninsured drops again

More than 8 million people signed up for health plans sold through those exchanges by the close of open enrollment in April, according to the federal government. An unknown number of those people previously were uninsured.

On Thursday, the public polling organization Gallup reported that the percentage of people without health insurance in the second quarter of 2014 was holding steady at 13.4 percent, after having seen a marked drop that coincided with the launch of the Obamacare exchanges last fall.

"The percentage of U.S. adults lacking insurance coverage in the first two months of the second quarter of 2014 is down from 17.1 percent in the fourth quarter of 2013 and from the 15.6 percent average in the first quarter of 2014," Gallup noted. "The current 13.4 percent average for the second quarter of 2014 is the lowest level recorded since Gallup began tracking this measure in 2008."

—By CNBC's Dan Mangan