Majority of Obamacare Customers Will Owe Money This Tax Season
The tax man cometh…
Tax season approaches and the Obamacare bill is finally coming due.
Sarah Ferris of The Hill has some bad news for people who have been receiving Obamacare subsidies:
H&R Block: Majority of ObamaCare customers paying back subsidy
A majority of ObamaCare customers, 52 percent, are being forced to pay back some of their subsidies during this year’s tax season, according to new data from H&R Block.
Customers are paying back an average of $530, which has caused a 17 percent drop in the average return so far this spring, according to the analysis by the tax services giant.
The Obama administration had warned that people could end up paying back some of their subsidies because many were relying on previous years’ income when applying for the tax breaks.
H&R Block has predicted that “most filers” would owe some of their subsidies back to the federal government because they were relying on 2012 income.
The new data, which was released Tuesday, only represents about six weeks of tax filings. Still, it could pose a significant challenge for the administration as it faces an already tough tax season.
Remember when Obamacare supporters insisted it wasn’t a tax? Good times.
Remember when Obama repeatedly claimed Obamacare would save families $2,500 per year?
Ryan Ellis of Americans for Tax Reform has more:
Surprise: Poorest Obamacare Enrollees Face $530 IRS Tax Bill
The majority (52 percent) of Obamacare enrollees receiving an advance premium tax credit to purchase Obamacare insurance is facing the prospect of paying back $530 of that tax credit to the IRS, according to a new study from H&R Block. This clawback is reducing the refunds for these taxpayers by 17 percent this filing season.
Under Obamacare, taxpayers earning between 133 and 400 percent of the federal poverty level are eligible to receive a tax credit to help purchase insurance on Obamacare exchanges. This tax credit is calculated using old tax data of the recipients. The credit is advanced ahead of time to the taxpayer’s insurance company. The taxpayer must reconcile at tax time the advance credit received with the actual credit she is eligible for.
Families of four earning less than $97,000 are eligible for a credit. So is a single mother with two children earning less than $80,000 and an unmarried/childless taxpayer earning less than about $12,000. By definition, these are the lowest income recipients of Obamacare health insurance outside the Medicaid-eligible population. Higher income taxpayers received no tax subsidy and aren’t facing this tax season surprise.
According to the study, a majority of credit recipients–52 percent–have had to pay back the IRS an average of $530, reducing their refunds by an average of 17 percent.
At least you can keep your doctor.
Donations tax deductible
to the full extent allowed by law.
In the immortal woirds of Bugs Bunny….
Just. Don’t. Comply.
Customers are paying back an average of $530…
Remember when everyone was excited over all the money they were saving because of the unexpectedly low gas prices?
Guess where it’s going.
“Higher income taxpayers received no tax subsidy and aren’t facing this tax season surprise.” Most would have welcomed a mere $517 tax increase. As it is, they have already been surprised with higher premiums and crappy insurance.
As someone whose individual policy was cancelled under the Orewellian-named “Patient” “Protection” And “Affordable “Care” Act (PPACA), and who is now paying much more for a much worse policy, and who is one of the mere 15% who didn’t get to steal other peoples’ money to pay for it, I find it a bit hard to have sympathy for any of these folks.
They didn’t get to steal other people’s money. They are ordered by law. Correct blame, wrong target.
No one is forced to accept welfare. Anyone who doesn’t want to take other peoples’ money can buy off-exchange and pay for their own insurance, like I do.
These are the same people who cheered when a doubling of the payroll tax was called not a tax but a ‘present’. I say screw them.
This was perfectly predictable (and I predicted that many people would owe money) but it may not be 50%
That’s a majority of people who pay H&R Block to do their taxes.
I don’t think you need a mnajoroty for this to cause political trouble.
Further proof that this administration’s policies are concocted in the depths of hell ~
Obama faces no more elections. The ones who should be trembling are the Democrat senators who are up for reelection in 2016 and other Democrats who have to run that year down ballot. They will pay the price for this folly, they should be afraid, very afraid. Soon, I think, they may begin deserting the Obama ship as they scramble to avoid another election night debacle. If they don’t, they deserve the fate that lies ahead for them for having learned nothing from the last election.
So let me get this straight…
1. Obamacare has deductions that are so high that most people won’t collect a dime for health care costs.
2. So high are these deductions that a considerable number of people did not sign up and will pay a penalty, eh, ahhh… Tax because even then it’s the prudent way for them to go.
3. Now there is a subsidy surprise which turns the whole affair into a ‘triple whammy,” eh?
“I am from the government and I’m here to he’p you” has never rang so loud and true…
*Apologies to Al Capp for the “triple whammy” mention.
1. The word is “deductible.” That is true.
Two kinds of policies might make sense. One that pays for everything, or one that is low cost but has a high deductible. Medical costs have risen so high that these have both a high cost and a high deductible. To get people to buy Obama did as much as possible to hide the true cost from people.
2. The number cab be expected to increase with time. Unless someone has lots of savings, the insurance doesn’t make sense. Or some non-compliant policy does.
3. And that’s without King vs Burwell.
Medical costs aren’t why Obamacare plans are so expensive. The new mandates are.
1) community rating aka can’t charge more to less healthy people
2) mandatory coverages like mental health and maternity even if you don’t want them
3) no caps on payouts
4) the subsidies themselves, which always inure to the benefit of the producer not the consumer
In a word: abort. Obamacare is merely a clump of policies.
Planned Government would reduce the cost of health care, education, welfare, etc., through the abortion of unwanted policies and regulatory monopolies.
Pro-choice! Policies and regulations, not wholly innocent human lives. Make life, not abortion.
I think the irony of ironies will be that Democrats will first take action to knock out the worst aspects of Obamacare, not in the name of creating a better product, but to ameliorate the damages to their electoral futures. Obama has already been doing this by postponing bad features past the 2012 general, past the 2014 midterms, etc. Well, the Obamacare chickens unavoidably come home to roost in 2015 and only embarrassingly self-serving EOs from the WH will save them now.
I suspect this whole thing wobbles out of control on its own and with Dem help over the next year or so. The Dems want this off the table for 2016. It’s a catastrophe as it stands, so…. look for Dems breaking off support for Obamacare as-is soon.
The PPACA lends new meaning to the term “catastrophic health insurance” … it’s not health insurance covering solely catastrophic events, as in the old meaning, it’s just a new health insurance system that in itself is … catastrophic.
The ACA was about extracting more money from the taxpayer. I’m all for the stupid taxpayers having to pony up more money for supporting that stupid bill.
It was a naked attempt to grow the ranks of the Free Stuff Army™.
Once 85% of insurance purchasers get comfortable with the idea that it’s cool to make the other 15% foot part or all of their bills, it’s going to be pretty hard to roll back.
Yeah, remember when those stupid “tea baggers” were trying to tell people this was going to happen, because you can’t add millions more, and cover all the freebies without paying for it???
Remember how those “tea baggers” were called “racist” and “enemy” and how we hate grandma?? Suck it up losers….me and many others out here will wait for the apology (that we know will never come, because Obama is never wrong /sarc)
Don’t tread on my Obamacare? Or what, the baby get’s it? Pro-choice!
That said, money does grow on trees, and is generated with electrical signals. However, education, development, resources, and environment do not. Neither does a human life. That is, a human life does not grow on trees or, for that matter, is not delivered by a stork. Spontaneous conception is a fairy tale.
It looks like MA just grubered Gruber:
What’s even more amusing is that this “subsidy” is for a contract for an ephemeral service. They can only “recover” if they need healthcare this year. This is a net gain for the Federal Govt’. They gave out credits they don’t have for a service they can’t guarantee will be timely and sufficient and now demand hard cash be refunded.
They’re spending money for nothing in return except a promise that they may or may not have to collect on.
HOPE they’re enjoying the CHANGE they’re experiencing.
Remember, these same people probably never exceeded their deductibles. Had they paid for their own health care bills and skipped insurance, their penalties would have been around $500, and they would have saved many thousands in insurance premiums. Their reward for doing “the right thing” and supporting Obama in this sham is another kick in the butt.
I’m guessing the 52% is skewed low….. people who are going to owe money wait until the last week to file their taxes.