Report: Obamacare Users To Receive Tax Jolt This Year

[Webster]

...as the IRS saying goes, "if you like your money, you can keep your money, too..."

(Newsmax)
Tax season is bringing an unwanted jolt to people who bought health insurance plans through Affordable Care Act exchanges in 2014 and now find themselves owing the IRS hundreds or thousands of dollars to repay federal subsidies that came with their coverage, CNBC reports. Obamacare customers who got subsidized coverage based on their estimated income are now staring at tax bills for part or all of the subsidy because their actual income turned out to be higher.

One retiree told CNBC he was "shocked" to learn he is on the hook for the entire subsidy — $6,624 — that covered the bulk of the plan he bought through HealthCare.gov. "I wasn't very happy," said retired U.S. Airways flight attendant Mike Highsmith, 61, who said he didn't realize his plan was subsidized until after he had done his taxes and discovered that a one-time boost in his income — an early 401(k) withdrawal — completely erased his eligibility for subsidies.

The cutoff for subsidies is at incomes higher than 400 percent of the official U.S. poverty rate, and one tax expert said that going over that amount by even a dollar can result in an IRS bill for thousands of dollars. "All those subsidies go to zero once you hit 400 percent of poverty," said Bradley Heim, an associate professor at Indiana University and a former U.S. Treasury Department economist.

Tax preparers and health-policy experts alike have been warning for months that Obamacare might induce sticker shock at tax time. "For about one in four tax filers, it’s turning out to be a nightmare, with extra paperwork and penalties," health policy analyst and former New York lieutenant governor Betsy McCaughey wrote this week in the New York Post. "For high earners or anyone selling a piece of property or business, Obamacare means higher taxes."

But many people like Highsmith were still caught unaware by the looming "subsidy cliff," CNBC reports, citing a study last year that found about four out of every 10 people had no idea they were receiving financial help through Obamacare.

About 10 million people — or 86 percent of Americans with insurance bought through the state and federal exchanges — are receiving subsidies to help pay their monthly premiums, the Obama administration reported in March. For an estimated 45 percent of subsidy recipients, tax time will actually produce a small bump in income, CNBC reports, because people who initially overestimated their 2014 income will get a check from the IRS for the subsidy difference.

But about half of subsidized insurance purchasers will owe the IRS enough money to either lower or wipe out the tax refunds they were anticipating, according to a Kaiser Family Foundation report cited by CNBC.

...still think Obamacare was a good idea?

 

[Wonko]

Public health care is a good thing and should work well but as soon as you add politicians it goes to hell in a hand cart pretty dam fast by the look of things.