In the second year, the penalty will rise dramatically, to $325 per adult and $162.50 per child, or two percent of family income, whichever is higher. The year after, the penalty will take another big jump, to $695 per adult and $347.50 per child, or 2.5 percent of family income. The only limit on the penalty is that it cannot be higher than the national average premium for a Bronze Plan purchased on the Obamacare exchanges. According to the Congressional Budget Office, that could be as much as $5,000 in 2016. And after that initial increase in the penalty, future penalties will rise according to the cost of living.

But Democrats in Congress feared public reaction to actually forcing Americans to write a check to the government to cover the penalty. So instead, the Internal Revenue Service, which is charged with enforcing Obamacare, will subtract the penalty from the tax refunds of those Americans who incur the penalty, provided they are due a refund. Otherwise, the IRS will not have a way to collect the money.

“In the first year, the mandate is useless,” said Laszewski. “One percent isn’t strong enough. The IRS can’t really collect it anyway from anyone who wants to flaunt it. Then we get to the second and third year. Two percent in 2015 and 2.5 percent in 2016. Now we have real money. The IRS still can’t collect it, but lots of people will still be troubled by it because they won’t like getting nasty letters from the IRS.”