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If You Bought Insurance Through Exchanges, You Might Get A Tax Hit

One of the reasons why we need a Democratic majority is to fix all these hidden costs.
If You Bought Insurance Through Exchanges, You Might Get A Tax Hit

If you bought health care coverage through an exchange, you might end up owing a lot in taxes. The National Journal:

Almost 7 million people picked plans through the exchanges and were eligible for subsidies last year. Half of them will end up owing the government money… The reason for this is because income—which is tied to the size of subsidies—can be very difficult to predict ahead of time. Most people elect to receive these subsidies in advance, when they enroll in health coverage, forcing them to predict what they’ll make. If this prediction is off (as it often is), they’ll have to reconcile it with what they actually made when they file their taxes.

Another 45 percent of people enrolled on an exchange and receiving subsidies will have a more pleasant tax-season experience: They’ll get money from the government. These people overestimated their income and have been paying more than the government says they should for their health insurance.”

There’s a smorgasbord of possibilities, a mix-and-match of expectations, subsidies, penalties, and reporting requirements. Some people will both get some money back and pay a fine… But for all the potential complexity, for three-quarters of taxpayers, filling out their tax forms will require very little headache, as long as they are insured. These people will only have to check a box saying they have health coverage.”

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