Looking for cash to pay for the payroll-tax cut, Republicans are trying to reclaim some of the funding going into President Obama’s Affordable Care Act — a move that could make the law’s signature health exchanges less attractive to the people Democrats were trying to help.
House Republicans hope to recapture $13.4 billion by demanding that Americans who were overpaid under the subsidy rules repay those funds the following year.
But each tightening is expected to push more people out of using the health exchanges that begin operation in 2014 — undermining a key goal Democrats had when they passed the health care law in March 2010.
“One of the major purposes of this law was to get people insured,” said Tim Jost, a professor of health law at Washington and Lee University. “So this really undermines the purpose if we keep going back to this again, again, again. This is a marriage penalty and a penalty on people trying to get better jobs.”
In December 2010, Congress — looking for money to sustain higher payments to doctors who treat Medicare patients — rewrote the subsidies to require a higher level of payback. The formula was tweaked again in April when Congress needed money to repeal the 1099 reporting requirement from the original health care law.
The Joint Committee on Taxation, which does official estimates for these kinds of matters, said the second time Congress tightened the rules, it meant 266,000 fewer people would take part in exchanges. The latest proposal would cause another 166,000 to forgo the exchanges.
The exchanges are designed to offer subsidies for Americans earning between 100 and 400 percent of the federal poverty level, with the level of subsidy determined by their income. About 23 million people are expected to purchase coverage through the exchanges in 2016.
If their income rose dramatically during the year, they no longer would have been eligible for the same level of subsidy, but the original law only required them to pay back a small amount — $250 for an individual or $400 for a married couple.
As the formula now stands, married taxpayers whose income is less than 200 percent of the poverty level would have to pay back $600 in subsidy overpayments; $1,500 if their income was between 200 and 300 percent of the poverty level; and $2,500 if their income was higher than three times the level.
Unmarried taxpayers would pay half as much.
Under the latest GOP plan, those earning four times the poverty level would have to pay back up to $3,200, while earners at 200 percent would pay back $1,500 and those below 100 percent of the poverty level would be required to pay $600.
As some on the left express fear that raising the caps will hurt low-income earners, others on the right say limiting repayments inflates government subsidization that they believe is already too high.
“I don’t see how, if you inadvertently give them too much and they have to hand money back, that’s such an egregiously bad thing,” said Ed Haislmaier, senior research fellow for the Heritage Foundation. “This isn’t a health care bill, this is a welfare bill.”
Mr. Obama twice has signed legislation raising the repayment caps, but he has promised to veto the GOP plan.
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
By Elaine Donnelly
Extending sexual misconduct to combat units
Independent voices from the TWT Communities
Entertainment News and Reviews from Washington, D.C. and beyond.
Columns from Voices around the World talking about the events, people, politics and social issues that concern us wherever, and whoever, we are.
Video reviews of today's hottest trends in Minecraft (servers and mods) along with a look at the latest video games with your host MCairsoft14 (alias Jerad Zad).
Covering the world of soccer, including the World Cup, Major League Soccer, D.C. United and the English Premier League and other interesting sporting events.
Benghazi: The anatomy of a scandal
Vietnam Memorial adds four names
Cinco de Mayo on the Mall
NRA kicks off annual convention