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April 15th – Tax Day – is going to be another not-so-fun milestone for hundreds of thousands of ObamaCare’s beneficiaries. The paperwork to comply with the law’s individual mandate is already going to be an annoyance to all who file taxes, but those who receive subsidies to help pay for their health insurance could be in for an especially rude surprise.
Anyone whose income is under 400 percent of the Federal poverty level is eligible for subsidies to help them pay for their government-mandated health insurance. Because the amount of the subsidies is based on income and family status, differences in the numbers reported to the exchange and those reported in the later tax return could result in filers being required to pay back some or all of their subsidies. USA Today notes: “Some married couples could owe $600 or $1,500 or $2,500 or even more. It might feel like a raw deal for some who are already suffocating under the escalating costs of health insurance.”
Of course, as Patrice Lee from the Independent Women's Forum observes, "In many instances, this will be a richly-deserved outcome for those who lied about their incomes." Because the exchanges have no ability to verify the incomes reported by people applying for subsidies through the exchanges, people could easily under-report their income in order to gain a larger subsidy. In some scattered cases, individuals may have even been encouraged by their ObamaCare "navigators" to commit this kind of fraud.
But a huge number of others who will have to pay back their subsidies will be those who may have simply failed to properly report one of the many "income and life changes" that can cause their subsidy level to decrease. This unwelcome surprise for many may come on top of a second year of increasing health insurance premiums, and on top of the fact that many of the ObamaCare-approved plans come with higher deductibles than many comparably priced plans pre-ObamaCare.
Regardless of whether they are tax cheats or innocent bystanders confused by a complicated new system, those whose subsidies will be deemed overpaid will be forced to answer to the merciless collectors of the IRS. And many will likely begin to wonder how affordable their new health care really is after all.