April 15th is almost here. Many tax filers, especially the 20-somethings, may get a nasty surprise. Penalties for not having health insurance in 2014 will be $95 or 1% of income, whichever is greater. Young, healthy workers just starting out are the least likely to buy health insurance, especially as the price for individual coverage has been inflated as much as 30% by Obamacare mandates. Every year the penalties increase (the greater of $325 or 2% of income in 2015).
Some people are discovering that they should have risked paying the penalty, rather than accepting the subsidies that come with Obamacare. Premiums were based on estimates of annual income. If it was underestimated, Obamacare enrollees might have to pay back some of their subsidy on their 1040s.
How many people are affected? H&R Block estimates that 52% of those who got Obamcare underestimated their income and have to pay some of it back. The average repayment is $530, a big hit for low income earners.
Of course, all this assumes that filers received the correct paperwork from their Obamacare insurance provider. The administration admits to sending out 800,000 erroneous statements. Two people that I know have spent hours on the phone trying to get their erroneous paperwork corrected. If they aren’t successful—and they haven’t been so far—they may have to pay money that they don’t owe or face an IRS audit.
Obamacare gives April 15th a whole new dimension of pain, especially for the workers just starting out. It gives our youth one more reason to reject the status quo and turn to liberty. That’s good because the deficit spending, unsustainable Social Security and Medicare programs, as well as the blowback from our military interventions, can only be rectified by abandoning Big Brother and embracing Lady Liberty (see, for example, Can We Keep Promises to Our Seniors Without Bankrupting Our Children and Grandchildren?).
Source Material: “IRS Sends Wrong Obamacare Tax Information,” and “Payback Requirements Surprise Obamacare Subsidy Recipients,” in Health Care News (Chicago, IL: The Heartland Institute) April 2015, p. 8 and 10, respectively.
