In one of the more unexpected developments in recent Congressional history, a House Ways & Means Committee vote relating to the Affordable Care Act (ACA) turned partisan. Astonishingly, all the Republicans voted one way; all the Democrats voted the other way.
The partisan split was all the more unexpected because the Republican-sponsored bill bears the politically neutral title “Protecting Taxpayers by Recovering Improper Obamacare Subsidy Overpayments.”
Under the ACA if a taxpayer has income below a certain level and isn’t offered employer-sponsored minimal coverage, the taxpayer is eligible for a premium assistance credit. The amount of the credit is paid in advance and goes directly to the health insurer.
A subsidized taxpayer is required to file a tax return to reconcile the advance payment with the actual credit the taxpayer proved to be entitled to. If the advance payment exceeded the taxpayer’s actual entitlement, the excess is a tax liability.
Now, the point of the bill: Current law places limits on the amount of the advance excess payment for which a taxpayer can be liable. The bill would eliminate those limits.
The 22 Republicans voting for the bill were of one mind: A taxpayer receiving more of a credit than appropriate should repay the entire excess, with no limit. The 15 Democrats had two main objections: First, we’re talking mostly about people who are poor and can’t pay it all back. Second, don’t forget that the money went to the insurance company—not the taxpayer. Let’s make the company do any repaying.
The bill is H.R. 4723.