Millions of Obamacare subsidy recipients may need to pay back-taxes.

The problem for Democrats is not exactly this: “As many as 3.4 million people who received Obamacare subsidies may owe refunds to the federal government, according to an estimate by a tax preparation firm… H&R Block is estimating that as many as half of the 6.8 million people who received insurance premium subsidies under the Affordable Care Act benefited from subsidies that were too large, the Wall Street Journal reported Thursday.” Although it’s definitely going to be a problem: ‘several million people suddenly discovering that they now owe back taxes to the government over Obamacare’ is not exactly a good scenario, especially if you belong to the political party that set that scenario up in the first place. But it’s still not the worst thing for Democrats.


No, the problem for Democrats here is that this is going to happen every year. The system is more or less designed to assume that people would twiddle with their coverage on a regular basis: as plans changed, improved, or degraded the consumer would be obligated to follow suit, in order to keep the subsidy.  This sounds perfectly reasonable… if you’re not the one doing it.  But out in the real world?  Well, I’ve written about this before:

  • April, 2014: “The uncertainty is really the killer.  And, bizarrely, it’s about the only thing that’s reliable about Obamacare.  There’s no way to plan around this monstrosity of a health care rationing system. Nobody is really certain that they’re not going to end up being smacked around by the new rules. And it would be better in a lot of ways if the law was even worse, as long as it was consistently worse. An inconsistent, unpredictable law is more or less guaranteed to become an object of fear.”
  • May, 2014:  “The administration, in its boundless wisdom, decided to handle [the government’s inability to calculate subsidies in real-time] by simply estimating the subsidy in problem cases.  If it’s too low, they’ll probably cut the applicant a check or give a tax credit.  Eventually. Probably before the end of the decade.  But if the subsidy is too high… well, the government is going to need that tax money immediately… This is where you distinguish the wonks from the politicos, by the way.  The former won’t understand why the latter are wincing at the situation, and the latter will wonder how on earth the former manage to go through life without a keeper.”
  • November, 2014: “Health insurance is scary because being sick is scary, and people do not like to think about scary things.  So when they have a policy that they like, they want to keep it because then they can stop thinking about the scary thing.  This is, by the way, not a silly or unreasonable desire to have, much to the disgust of Obamacare’s more sociopathic boosters: people should be allowed quiet enjoyment of their lives whenever possible.  Unfortunately, nobody told the Democratic party leadership that.”

Nothing about any of this has changed since then.  The basic problem still remains: the way that health care subsidies are calculated and implemented is as fundamentally messed up as the rest of Obamacare is*.  Possibly the Democrats should hope that Halbig v. Burwell gets decided against the administration.  It’d represent the Left’s last chance to get the law back into Congress for any kind of repair.  That ‘repair’ would also involve substantial ‘gutting’ is… a reminder that actions have consequences.  Think of it as a teachable moment! My kids love to hear that one**.

Moe Lane (crosspost)

*This is usually the point where defenders of Obamacare start to panicky insist that we provide an alternative to their horrible program.  That many of us (to mangle JRR Tolkien) should wish to cast Obamacare down and have nothing in its place is not a thought that occurs to their minds.

**My kids do not actually love to hear that one.  To be fair, they’re both, well, kids.


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