Freedom Line Blog

Nearly every American that received an ObamaCare subsidy to help pay for health insurance last year got the wrong amount.

“Only 4 percent of the people who signed up for ObamaCare got the correct subsidy, so a whopping 96 percent will see their tax bill adjusted, some up and others down,” writes Betsy McCaughey. “Who would design a system that’s right only 4 percent of the time?”

The main reason for the discrepancy is that a person must estimate – i.e. guess – their entire taxable income for the next year in order to find out how much of a subsidy they qualify for under ObamaCare during enrollment season. A raise or switch to a higher paying job could be zeroed out because the government gets to “clawback” the difference. Losing a job means a fatter refund.

You can see which direction ObamaCare’s incentives point to, which provides a partial answer to McCaughey’s rhetorical question – people who penalize moving up the income ladder.