Are we still calling it “healthcare reform?” Average payback is $729…from families with modest incomes who qualified for subsidies. Average uninsured penalty also almost double the $95 stated amount. Obama obviously still telling America what it wants to hear, without bothering to confirm facts…
Back in January, H&R Block figured that about half of the 6.8 million people who were getting Obamacare subsidies would owe some of the money back. Another expert reckoned the average payback at $208.
That was enough to set off alarms about the “unpleasant tax surprise” these millions would face. The tax experts were too optimistic, however. H&R Block now figures that two-thirds of Obamacare enrollees who got subsidies had to pay at least some of it back. And the average payback was $729.
So roughly 5.5 million Obamacare enrollees had to return, on average, almost a quarter of their premium subsidies. Given that these subsidies are available only to families with modest incomes, that’s got to hurt.
(H&R Block also found that a quarter of Obamacare enrollees got an average of $425 in additional tax credits for last year.)
Why all the subsidy mistakes? Because Obamacare uses a Rube Goldberg subsidy scheme that requires enrollees to predict next year’s income. If they guess too low, their insurance subsidies will be too high. Overestimate their income and the subsidies will be too low.
H&R Block also found that the average penalty paid by the uninsured last year was $178. That no doubt was also a surprise to many who thought it would be just $95.
In addition, the vast majority of filers who claimed an exemption from the individual mandate penalty picked from a list of exemptions that didn’t require verification from their local Obamacare exchange.
Unfortunately, H&R Block didn’t break down what share of the uninsured claimed an exemption instead of paying the fine. That would provide a good insight into the effectiveness of the individual mandate.
But it did say more taxpayers are likely to seek those exemptions next year when filing their 2015 income taxes, since the penalty for not buying government-approved insurance goes up sharply this year.
If Obamacare’s popularity doesn’t climb much this year, it’s a good bet these unpleasant tax surprises will be part of the reason.
[A recent editorial from Investor’s Business Daily]
As always, posted for your edification and enlightenment by
NORM ‘n’ AL, Minneapolis