Last year, the Internal Revenue Service (IRS) overpaid nearly $3.5 billion in Obamacare tax credits that cannot be retrieved due to the program’s restrictions – a loophole made under the Obama administration to lure more Obamacare purchasers that has defrauded American taxpayers billions of dollars.
“A Treasury watchdog said the government paid out roughly $24 billion in Obamacare subsidies in the heart of the 2017 tax-filing season, with $5.8 billion in overages,” the Washington Times reported. “Of that, just $2.3 billion was clawed back, leaving $3.5 billion in outstanding excess payments.”
Former President Barack Obama’s signature health care plan continues to confound Republicans more than a year after he left office, as they have still been unable to repeal the so-called “Affordable Care Act’” law that has been deemed by many lawmakers as unconstitutionally forcing Americans to purchase services they do not want.
Conservatives on Capitol Hill contend that the billions of dollars fraudulently mishandled by the IRS over the latest exposed Obamacare debacle could have been used by the government to provide much needed programs for veterans or improve America’s crumbling infrastructure.
Rep. Phil Roe (R-Tenn.) already knew of Obamacare’s numerous problems, but he did not realize the magnitude of its wasteful spending – insisting that older veterans and their caregivers in dire need could have been helped if the wasted taxpayer money would have been used to pay for an assistance program to meet their needs.
“The overpayments were that much?” Roe inquired in shock, according to the Washington Times. “I can think of a lot of things I can use $3.5 billion dollars for.”
No mistake …
Loopholes worked under Obama’s controversial and reportedly unconstitutional health care program intentionally directed taxpayer funds to be misappropriated.
“Most Obamacare exchange customers receive taxpayer-funded subsidies to help cover their premiums,” the Washington Times’ Tom Howell, Jr., explained. “The amount they receive is based on their expected earnings, [and] at the end of the year, they are supposed to reconcile what they anticipated with what they actually earned. [but] because some received higher incomes – through raises, promotions or better jobs – they have to repay the IRS.”
In order to make sure the Obama’s problematic health care program was purchased by American consumers, the former president’s lawmakers fraudulently devised a scheme that would ultimately cost taxpayers billions in fraudulently wasted hard-earned dollars.
“But authors of the 2010 law were afraid that the threat of a big tax bill would discourage people from buying Obamacare coverage altogether, so they set limits on the amount of money the government could claw back,” Howell, Jr., noted. “Those limits [were included] because Congress feared it was giving away unearned money.”
More and more money was reportedly given away at taxpayers’ expense as an increased number of Americans were forced to sign up for the controversial plan.
“The $3.5 billion figure told lawmakers that they are still leaving a lot of money on the table,” Howell, Jr., added. “The 2017 figure is more than five times the number from 2015, which was the first tax year after Obamacare was fully operational.”
It is argued that the blatantly misused billions could have been used to strengthen the United States’ border security and other much-needed American medical costs.
“Assuming similar overages for the rest of the decade, the $35 billion would be more than enough to pay for President Trump’s border wall trust fund, with money left over to cover an anti-opioid effort,” Howell, Jr., pointed out.
Economic experts offered to explain the spike in overpaid amounts last year to Obamacare program members.
“Douglas Holtz-Eakin, a former Congressional Budget Office director [indicated that] people underestimated their income before their earnings rose in a good economic climate, so they received more taxpayer assistance than they should have,” he added.
Washington and Lee University law professor Timothy Jost stressed that the massive waste of taxpayer funds could be attributed to skyrocketing premiums on the economically unstable exchanges – or credited to the fact that many consumers simply found out how to work the system to their economic advantage.
“There may be some strategic behavior involved, with some people intentionally underestimating their income with the expectation that they will not have to pay back excess credits beyond the cap,” Jost offered, according to the Washington Times. “But estimating income for people with seasonal or hourly pay jobs is very difficult, and expecting people to revise their income estimates every month, with corresponding revisions in their premium payments, is not realistic.”
Advocates of Obamacare have declared their desire of not being too demanding on customers to get the overpaid funds back, with many contending that there is little reason to repeal the caps and insist that the excessive subsidies be repaid in full. This is the argument given by Families USA Director of Access Initiatives Cheryl Fish-Parcham, who leads her consumer group, which was organized to champion so-called “affordable health care.”
“There are tips people get that are hard to predict, there’s holiday pay – there are many reasons people might have done their best but gotten an overpayment,” Fish-Parcham insisted.
In other words, the money was stolen from hardworking taxpayers and given to those who did not earn or deserve it.
“Under Obamacare, the subsidy money goes straight to insurers, though the customers are responsible for returning overpayments,” Howell, Jr. stressed. “Once they hit the repayment cap, however, the extra money amounts to a taxpayer-funded benefit they don’t deserve.”
Sen. John Kennedy (R-La.) argues that the Obama IRS’s fraudulent handling of funds – that allows Americans to keep benefits to which they are not entitled – makes Republicans’ case against Obamacare that much stronger, insisting that the infrastructure, education, national defense and public safety could have put the funds to proper use.
“That’s just yet one more absurdity in the Affordable Care Act – it makes no sense,” Kennedy contended, according to the Washington Times. “Maybe – God forbid, don’t faint dead away – we could actually give some of it back to the taxpayers.”
An invitation to partake in fraud?
The IRS essentially alerted Americans that they could take advantage of the system initially, but pay the government back if estimations give them too much money back.
“When you purchased coverage for 2014 through the Marketplace, you may have chosen to have the government send advance payments of the premium tax credit to your insurer to lower your monthly insurance premiums,” the IRS’s Obamacare policy informs on its website. “At that time, the Marketplace estimated these credits based on information you provided about your expected household income and family size for the year.”
Even though taxpayers are told that they must reimburse funds, the agency was fully aware that large amounts would never be repaid.
“If you chose to have advance credit payments sent to your insurer, you must file a federal income tax return, even if otherwise not required to file,” the IRS’s Obamacare site explains. “You will need to reconcile these payments with the amount of premium tax credit you’re eligible for on your tax return. Receiving too much or too little in advance can affect your refund or balance due when you file.”
Just the latest revealed Obama scandal
The wasted $3.5 billion in taxpayer funds was fully premeditated by the designers of Obamacare and carried out by the IRS.
“[The ‘caps’ … provision written into ObamaCare … actually limited how much of any possible overpayments could be recuperated,” the American Center for Law and Justice (ACLJ) pointed out. “As a result, only $2.3 billion of the excess payments have been returned. The rest is simply gone.”
This type of fraudulent activity orchestrated under the Obama administration was by no means an exception, as tens of billions more in taxpayer funds were wrongfully doled out to underserving Americans during the last year of Obama’s second term, with more than $100 million of it fraudulently going to illegal aliens.
“This is not even the first time the IRS’s bungling bureaucracy has handed out obscene bogus tax credits at the expense of American taxpayers,” the ACLJ asserted. “[T]he IRS paid $24 billion in potentially bogus refunds claimed under several controversial tax credits in 2016. Of that number, $118 million was paid to people who weren’t even authorized to work in the U.S.”