From the NY Times:
The Obama administration is contacting hundreds of thousands of people with subsidized health insurance to resolve questions about their eligibility, as consumer advocates express concern that many will be required to repay some or all of the subsidies.
Of the eight million people who signed up for private health plans through insurance exchanges under the new health care law, two million reported personal information that differed from data in government records, according to federal officials and Serco, the company hired to resolve such inconsistencies.
The government is asking consumers for additional documents to verify their income, citizenship, immigration status and Social Security numbers, as well as any health coverage that they may have from employers. People who do not provide the information risk losing their subsidized coverage and may have to repay subsidies next April.
Federal subsidies for the purchase of private insurance are a cornerstone of the Affordable Care Act. More than eight out of 10 people who selected health plans through the exchanges from October through mid-April were eligible for subsidies, including income tax credits. So far this year the federal government has paid out $4.7 billion in subsidies, and the amount is expected to total $900 billion over 10 years.
Obamacare subsidies could hurt at tax time
Most Americans are well aware that if they don’t have health insurance they’ll be subject to a tax penalty under the Affordable Care Act. What many don’t know is that if they’ve enrolled in an Obamacare exchange plan with a government subsidy, they could also find themselves on the hook to Uncle Sam next spring.
“It’s not a subsidy; it’s an advanced tax credit. It’s actually based on a previous year’s income,” explained William Cobb, chief executive of H&R Block, the nation’s largest tax-preparation service.
So if your income changes this year, he said, the amount of your tax credit could be impacted.
“When the year is finished and you’re filing your taxes, that’s when the reconciliation occurs against your actual income,” Cobb said. “If you made more money, you’re going to owe money back against your tax credit.”
I certainly hope that nobody here is impacted by yet another foul-up by the most transparent administration in American History