The Centers for Medicare and Medicaid Services (CMS) yesterday published a final rule on who qualifies to opt out of the so-called individual mandate to buy health insurance or pay a fine under the Affordable Care Act (ACA). The biggest category is simply those who cannot afford it and who would thus qualify for government assistance.

In addition, certain groups also qualify under the exemption:

  • Members of federally recognized Indian tribes;
  • Individuals who experience a hardship, which under the rule would include those who would have been eligible for Medicaid but happen to live in a state, such as Kansas, where officials have chosen against expanding the program;
  • People experiencing a short gap in coverage. A short gap is less than three consecutive months without insurance;
  • Members of certain religious sects;
  • Members of a health care sharing ministry;
  • People in jail or prison;
  • People in the country unlawfully and U.S. citizens living abroad.

Given the number of exempted persons and groups, the Congressional Budget Office (CBO) estimates that fewer than 2 percent of all Americans will end up paying the tax penalty that represents the "stick" in the ACA carrot-or-stick mandate.