Many of the headlines today have an uncanny resemblance to those of a year ago. Recent reports indicate that Obamacare is having negative effects on job prospects and reducing the hours that employees can work; the law is leading to more cancelled policies and shrinking provider networks so people are losing access to their doctors and hospitals; and once again, just before open enrollment begins in November, Obamacare premiums are scheduled to rise despite President Obama's promise that families would save $2,500 a year under his law.
The law's continued unpopularity suggests that most Americans are not welcoming this new healthcare reality. Worse, many Americans are about to see another painful, yet predictable, Obamacare flaw set in when they go to complete their annual tax returns next year.
Obamacare originally required anyone who receives tax subsidies to pay for their plans to have their income level verified first to make sure that they qualify. But in the months leading up to implementation last year, the Obama administration rewrote the rules and delayed the verification-first provision. This means that anyone who misrepresented their 2014 income — on purpose or by accident — would later be subjected to reimbursing the federal government for any overpaid subsidies they may have received, or potentially the entire amount of the subsidy. In the case of an applicant who received cost-sharing subsidies, the federal assistance is provided directly to the insurance company, which means many are unaware of the amount of the assistance.
This next tax season marks collection time, and already the Obama administration has identified about 1.2 million people who have signed up for Obamacare plans but who have inconsistencies with their reported income.
News outlets have described this as a tax-filing "nightmare" because many Americans will fill out these new and complicated tax forms that can place them at risk for tax delinquency. The administration failed to provide clear instructions in the rush to sign people up last year, and now low to middle income Americans may be penalized by the Internal Revenue Service because of the administration-created confusion.
And while this next tax filing season will be the first one where Americans will be subjected to this tax headache, the continued flaws in Obamacare and its implementation could make this much more painful in years to come. As Obamacare continues to cause skyrocketing premiums, subsidies will rise and put Americans at risk for higher back taxes. Also, the Obama administration's decision to automatically re-enroll people in their same Obamacare plans for next year could cause even more pain — these same plans are unlikely to be the most affordable ones available, and therefore will also lead to unnecessarily high subsidies that tax payers will be on the hook for.
As many as 85 percent of Americans who signed up for Obamacare plans are receiving some sort of federal subsidies, putting them at financial risk down the road if their incomes are different than what they first estimated. Much of this concern would be unnecessary if there had been an income verification system in place before the law rolled out. In fact, the House acted to pass one after the Obama administration rewrote the rules. Unfortunately, the White House and Senate Democrats failed to protect the American people in this regard. Now, when the law is already more unpopular than ever, we can thank Obamacare for an unnecessarily painful tax season.Rep. Black is a Republican who represents the 6th District of Tennessee. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions for editorials, available at this link.