Medical staff stand outside the imaging room at Dignity Health West Flamingo Campus, 9892 W. Flamingo Road, on Thursday, Aug. 10, 2017. (Jeff Scheid/The Nevada Independent)

Congress is expected to begin voting today on a final version of a Republican-backed tax overhaul bill that — among other significant changes to the nation’s tax code — would deal a heavy blow to the Affordable Care Act.

The final draft of the legislation, unveiled on Friday, retains a provision from the Senate-approved tax proposal repealing Obamacare’s individual mandate, which requires taxpayers to purchase health-care coverage or else pay a tax penalty. The mandate is the least popular portion of the 2010 federal law, with 55 percent of Americans in support of eliminating it as part of the tax overhaul.

The nonpartisan Congressional Budget Office has estimated that repealing the individual mandate will lead to 13 million more people not having health insurance in the next 10 years, including both those who voluntarily decide not to purchase insurance and those who will be priced out of insurance as health insurance pools shrink and costs soar. But getting rid of the mandate would also save the federal government $338 billion and free roughly 73,000 Nevada households from the tax burden they faced in 2015 for not having health insurance.

So who are those 73,000 households, where do they primarily reside in the state and why are they paying the penalty instead of purchasing health insurance? Let’s take a look.

Who are Nevada’s penalty payers?

The Internal Revenue Service’s (IRS) most recent data shows 72,590 tax returns filed in Nevada in 2015 reported making an individual responsibility payment. That means at the least 72,590 Nevadans paid some dollar amount of penalty for not having health insurance in some or all of 2015, though it’s likely more paid the penalty since that number doesn’t reflect multi-person households where multiple uninsured individuals were levied the penalty for not having health insurance on the same tax return.

In 2015, the penalty for not having health insurance was $325 per adult (half that for a child) or 2 percent of the household’s annual income, whichever is higher. That rose to $695 per adult or 2.5 percent of the household’s income for 2016 and 2017. (The mandate went into effect in 2014.)

Most penalty payers in Nevada in 2015 made either between $25,000 and $50,000 (41 percent of tax filers) or less than $25,000 (39 percent of filers). Roughly 12 percent of filers who paid the penalty made between $50,000 and $75,000, 5 percent made between $75,000 and $100,000, 3 percent made between $100,000 and $200,000 and 0.1 percent made more than $200,000.

Overall, roughly 5.5 percent of Nevadans paid the individual mandate penalty in 2015, higher than the national average of 4.5 percent and the highest rate of any state that opted into Medicaid expansion under the Affordable Care Act. The expansion allowed Nevada to provide coverage to all low-income adults who make up to 138 percent of the federal poverty line, filling in a gap that left childless adults without coverage.

Still, Nevada’s uninsured rate plummeted after the passage of the Affordable Care Act and Republican Gov. Brian Sandoval’s decision to opt into Medicaid expansion, decreasing from 19 percent in 2013 to 9 percent in 2016. The number of Nevadans enrolled in Medicaid rose from 13 percent to 18 percent over the same time frame.

It’s not clear why roughly 28,430 households that made less than $25,000 a year paid the penalty in 2015. Any families of three or more making $25,000 a year would have been Medicaid eligible, any one- or two-person households making that much should have still qualified for subsidies to reduce the cost of purchasing insurance through the Obamacare exchange and many other individuals should have been able to file for an exemption from the penalty due to hardship if all else failed.

On top of that, some number of filers in the $25,000 to $50,000 income group should also have been eligible for subsidies to purchase insurance on the Obamacare exchange, since assistance is awarded on the basis of need up to 400 percent of the federal poverty line — about $47,000 for a one-person household and $97,000 for a four-person family in 2015.

Heather Korbulic, executive director of the Silver State Health Insurance Exchange, said she thinks the numbers represent a “disconnect in awareness” among members of the public about what health benefits they might qualify for, whether through Medicaid or subsidies on the exchange. She noted that the exchange was still ramping up in 2014 and 2015 and that if 2016 data were available, they might show a drop in the number of people paying the penalty with increased knowledge about the Affordable Care Act as well as an increase in the severity of the penalty that year.

In fact, the IRS actually sent letters to almost 319,000 taxpayers nationwide who may have unnecessarily paid the individual mandate penalty in 2014. It is unclear how many of those returns were later amended.

But the Nevada data also demonstrate “kind of the sweet spot for the penalty,” said Karen Pollitz, senior fellow at the Kaiser Family Foundation. People making $25,000 to $50,000 might have high enough incomes to owe a penalty if they’re uninsured but may not be receiving employer-sponsored health coverage through their jobs, she said.

Pollitz also noted that though low- and lower-middle income folks represent the bulk of penalty payers, they don’t show the bulk of the penalty dollars paid to the federal government.

For instance, those in the lowest income group in Nevada, households making under $25,000 a year, paid an average penalty of $282 in 2015. By comparison, those making between $50,000 and $75,000 paid an average penalty of $686, while roughly 60 filers making more than $200,000 paid an average penalty of $2,317. Nevada’s average penalty that year was $459, just three dollars less than the national average.

Many of those who choose to pay the individual mandate penalty choose to do so because the cost of the penalty is cheaper than the cost of an insurance plan, which can end up costing thousands of dollars a year for those who make above 400 percent of the federal poverty level and don’t qualify for subsidies (though more than 80 percent of people purchasing insurance on the exchange do qualify for subsidies.) An unsubsidized plan for a 35-year-old in Clark County costs around $300 and $400 a month, while a 60-year-old could be paying $600 to $900 a month without subsidies.

Where do Nevada’s penalty payers live?

Nevada’s penalty payers are generally scattered across the state, though there are higher concentrations of households paying the penalty in certain zip codes.

The zip codes with the highest percentage of penalty payers in 2015 were: Amargosa Valley (89020, 9.52 percent); Reno (89502, 8.37 percent); Sparks (89431, 8.22 percent); Sun Valley (89433, 8.05 percent); Reno (89512, 7.99 percent); Spring Valley (89103, 7.82 percent); downtown Las Vegas (89101, 7.46 percent); North Las Vegas (89030, 7.4 percent); Spring Valley (89118, 7.33 percent); and Reno (89501, 7.26 percent).

In addition to parts of urban Las Vegas and Reno, several rural zip codes exceeded Nevada’s 5.5 percent penalty payer average: Tonopah (89049, 7.02 percent); Jackpot (89825, 6.98 perent); Sandy Valley and Primm (89019, 6.84 percent); Ely (89301, 6.55 percent); Caliente (89008, 6.52 percent); Elko (89801, 6.2 percent); Eureka (89316, 6 percent); Smith Valley (89444, 5.79 percent); Pahrump (89048, 5.6 percent); Lovelock (89419, 5.52 percent); and Hawthorne (89415, 5.51 percent).

But, at the same time, all of the 14 zip codes with no penalty payers in 2015 were either in rural areas or outlying areas to the Las Vegas and Reno metropolitan areas. They include Goldfield, Orovada, Dyer, Austin, Searchlight, Pioche, Imlay, Smith Valley, Golconda, Crescent Valley, Lamoille, Mt. Charleston, Mountain Springs and Glenbrook.

The fact that no taxpayers reported paying penalties doesn’t mean those zip codes had a 100 percent insured rate, though. The IRS used to accept so-called silent returns where taxpayers did not report whether they met the coverage requirements under the Affordable Care Act, though it has said that will not be the case for 2018.

Why do some zip codes have higher percentages of penalty payers?

Neither Nevada nor national health-care experts in interviews with The Nevada Independent were able to offer a discrete explanation for why some zip codes have higher percentages of people paying the individual mandate penalty than others. They pointed to a number of factors that could possibly contribute — socioeconomic status, employment, access to health care, awareness of insurance options and political preference among them — but it’s not clear how those variables might interact with each other and to what degree.

“When you get into zip code analysis, it’s really hard,” Pollitz of the Kaiser Family Foundation said.

John Packham, director of health policy research in the state’s rural health office, noted that Nevada’s rural counties made some of the most significant gains in health insurance coverage under the Affordable Care Act. However, he said that if he went out on the street and asked the average person today, he or she probably wouldn’t know about eligibility for some kind of a subsidy.

“You just hear premiums are going through the roof, the sky is falling when, in fact, particularly when you’re on that lower end — 138 percent or 300 percent of the federal poverty level — you’re probably going to get a substantial subsidy,” Packham said.

Packham noted that most of the country believes they’re in the middle class and therefore might not be aware that they qualify for any sort of government assistance in purchasing health insurance.

Korbulic said that people who are sick or need insurance typically find a way to get it. It’s those who are younger and healthier who take extra effort to get them to buy insurance on the marketplace, and the individual mandate is one of those drivers, she said.

But as far as why more people are paying the individual mandate in certain zip codes, Korbulic said it doesn’t seem to have “a lot of rhyme or reason.” She noted that the exchange takes a different approach to outreach about the exchange in the rural areas, foregoing freeway billboards for more grassroots outreach through community partners and health centers in the area.

“A portion has to do with outreach, a portion has to do with awareness and I feel pretty confident in some of it having to do with provider availability,” Korbulic said.

The lingering question is what will happen if the individual mandate is repealed. The roughly 73,000 Nevada households that paid a tax penalty in 2015 will no longer have to worry about that financial burden in the years to come. However, it is also likely to throw an additional dose of uncertainty into an already fragile individual market that saw an exodus of insurance companies earlier this year, jeopardizing coverage for its roughly 90,000 enrollees.

“To take away or repeal the individual mandate, to remove a leg of the stool, is really going to be detrimental to an already volatile market,” Korbulic said.