Not only are people paying more for their health insurance, others who signed up for ‘Obamacare’ and received a subsidy might receive an extra surprise next year:
“It’s not a subsidy; it’s an advanced tax credit. It’s actually based on a previous year’s income,” explained William Cobb, chief executive of H&R Block, the nation’s largest tax-preparation service.
Wait, what? So you aren’t really receiving a subsidy, they are giving you a tax credit that you will have to pay back if your income goes up next year? BRILLIANT!!!
“When the year is finished and you’re filing your taxes, that’s when the reconciliation occurs against your actual income,” Cobb said. “If you made more money, you’re going to owe money back against your tax credit.”
In a report published in Health Affairs, researchers at UC Berkeley and UCLA calculated that in California, three out of four subsidy recipients will likely see their income change more than 10 percent year-over-year, and that will result in about a third having to make repayments. According to the researchers, for about one in 10, it could amount to a full repayment because their higher incomes will put them above the 400 percent poverty level. “A lot of low income people piece together two to three part-time jobs,” said Tricia Brooks, senior fellow at the Georgetown University Health Policy Institute. “I think that’s where it becomes particularly more challenging to calculate your income accurately. For the self-employed… it is particularly challenging to think about that.“
People who work hard are going to get shafted…again. And not even the ‘experts’ can tell you if you made a mistake or not.
The complexity of the tax code virtually insures there will be mistakes in ACA credits, said Douglas Holtz-Eakin, president of American Action Forum. Treasury data shows the earned income tax credit (EITC) for low-income families has resulted in a 20 percent payment error rate during the last 10 years.
“Like the ACA premium credits, the EITC is a means-tested, refundable tax credit, and is the largest refundable tax credit in the tax code at the moment,” he said during a congressional hearing on ACA taxes. “An error rate of 21 percent, the minimum rate estimated by Treasury over 10 years of EITC payments, would result in $152 billion in erroneous ACA premium credit payments.”
Another bad law that is killing the economy and impoverishing millions of Americans. Man, I am starting to miss the ‘malaise days‘ of Jimmy Carter.