Mark Caserta: Tax storm brewing over Obamacare

5 Feb

And it’s heading our direction…

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An FSP editorial

Feb. 05, 2015 @ 12:01 AM

The 2015 tax filing season will predictably leave a very sour taste in the mouths of millions of unsuspecting taxpayers.

The New York Times reported over the weekend that Obama administration officials are scrambling to avoid a “political firestorm” resulting from the individual mandate of the Affordable Care Act. Largely due to the opaque nature of the Obamacare rollout, many people still seem not to realize the individual mandate of the ACA forces everyone to purchase a government approved health care plan, even if you don’t want it, or be fined by the IRS.

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The penalties, approaching 1 percent of income for some households, are supposed to be paid with income taxes due April 15. Additionally, many people with subsidized coverage purchased through the new public insurance exchanges will need to repay some of the subsidies because they received more than they were entitled. Most people reportedly chose to have their subsidies paid in advance, based on projected income for 2014. If their actual income proves to be higher, due to a raise or a new job, they will be entitled to a smaller subsidy and must repay the difference.

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“If the advanced premium tax credit amount is too high, the taxpayer could have an unwelcome surprise and owe money,” said Nina E. Olson, the national taxpayer advocate at the Internal Revenue Service.

It seems that many people awarded insurance subsidies for 2014 didn’t realize the amount would be reviewed and recalculated at tax time in 2015. Go figure.

An estimated six million taxpayers will have to pay a fine this year because they chose “not” to obtain healthcare coverage in 2014. So understandably, the expectation for taxpayer questions is very high. But with budget cuts within the IRS, available support may be scarce.

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“The IRS is unlikely to answer even half the telephone calls it receives,” Olson added. “Taxpayers who manage to get through are expected to wait on hold for 30 minutes on average and considerably longer at peak times.”

Hardest hit in this healthcare horror are young healthy adults in their 20s or 30s who are being asked to shoulder the brunt of the costs to effectively subsidize the healthcare of older Americans. Those opting to remain uninsured will be subject to a penalty for each month they lacked coverage.

According to the Congressional Budget Office, roughly one million low-income Americans will pay a fine under Obamacare. So as with many young adults, not only will they not have healthcare, Barack Obama will still require them to shoulder some financial responsibility through a levied fine.

So, what do we have to show for this traumatization of nearly 20 percent of our economy? Based on the experts’ numbers, about 22 percent fewer Americans are now uninsured, at an estimated cost per person of around $50,000, based on a recent 10-year cost estimate by the CBO.

Yes, the Obama administration has certainly demonstrated some “shrewd” business tactics.

Regardless, many taxpayers are in for a rude awakening very soon. And this storm is still brewing.

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Mark Caserta is a conservative blogger, a Cabell County resident and a regular contributor to The Herald-Dispatch editorial page.

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