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, …read more    

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