Yes, Some People Will Have to Pay Back Their Obamacare Subsidies
by Amy Payne, Heritage Foundation, May 21, 2014
Obamacare offers subsidies to help pay for health insurance – if you are buying insurance through the federal exchange and your income qualifies. But now the word is out that at least 1 million people are probably getting the wrong subsidy amounts.
The Washington Post has inside sources providing all sorts of juicy details on this problem – but it didn’t take an investigative reporter to predict this was going to happen.
Heritage expert Alyene Senger warned that Obamacare’s subsidies are tied to income – and if your income changes at any point during the year, your subsidy is supposed to change, too. She explained in January:
if a person’s income fluctuates, which happens more frequently than many realize, the subsidy amount will change from month to month. Thus, when it comes time to file taxes in April, the amount of subsidy received over the past year must be reconciled with the final calculation of the total subsidy for which the individual was eligible—based on actual income for the entire tax year.
So if you qualify for more subsidy help than you receive during the year, you’ll get a tax refund. But if you were given more subsidy than your income qualifies you for, you will be required to repay the excess subsidy.
>>> Watch Heritage’s Alyene Senger on Fox News:
Now, the Post reports that the government is attempting to keep up with this – except that the part of Obamacare’s computer system that is supposed to match proof of income with people’s Obamacare applications is, well, not built yet.
Since taxpayers are funding the subsidies, it’s important to make sure the correct amounts are going to the correct people, right? Well, that does make the Obama administration “sensitive” these days, the Post says:
Beyond their concerns regarding overpayments, members of the Obama administration are sensitive because they promised congressional Republicans during budget negotiations last year that a thorough income-verification system would be in place.
This setup is a disaster. And it will ensnare a lot of people. Senger pointed to one analysis estimating that nearly 38 percent of families eligible for subsidies also experience “large income increases” at some point during the year – meaning they would have to pay back some or all of their subsidies.
“The issue is symptomatic of many problems that will plague the law in coming years,” Senger said.
Is it any wonder that 60 percent of voters in a recent poll said the debate about Obamacare is not over? And 89 percent said Obamacare will affect their voting decisions this fall.
Louisiana Gov. Bobby Jindal is right – Obamacare is still not the answer for America’s health care needs. It’s time for Congress to look at patient-centered alternatives that would restore choice to American health care – and stop the unending tales of Obamacare disaster.
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