# Question on Obamacare subsidies **URL:** \ **Category:** Factual Questions\ **Created:** [June 17, 2014, 2:27am UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957 "2014-06-17T02:27:11Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [June 17, 2014, 2:27am UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/1 "2014-06-17T02:27:11Z")
So here is the scenario: let’s say I am a single guy, I sign up for Obamacare and when I am signing up I estimate my income will be $15K (above the FPL but below 133% of FPL), so I am eligible for subsidies, and let’s say over the year they come to $4000 (the amount paid in Silver plan premiums that is over the 2% - that is, $300). Then, at the end of the year, I find out that my income was, in fact, $11K. Or $8K. Anyway, less than FPL. Which makes me ineligible for subsidies. Does the government make me repay them the $4K? ---
**Author:** ![wevets](https://avatars.discourse-cdn.com/v4/letter/w/e9a140/32.png) [@wevets](https://boards.straightdope.com/u/wevets)\ **Post date:** [June 17, 2014, 3:48am UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/2 "2014-06-17T03:48:54Z")
The answer to your question can be found here: [What Happens If My Income Changes After I Receive An Insurance Subsidy? - KFF Health News](http://www.kaiserhealthnews.org/Stories/2013/December/06/Michelle-Andrews-health-insurance-subsidy-income.aspx) > [@Michelle Andrews](#): > > At your new salary, you’d no longer qualify for a premium tax credit, and you’d have to pay the full premium. At tax time, the government will reconcile the amount that you received in tax credits against your income for the year, in our example, roughly $38,000, including six months of salary and six months of unemployment insurance. > > If the amount you received in tax credits is higher than it should have been based on your annual income, you’ll have to pay back the difference. But under the law your liability is limited if your income is less than 400 percent of the federal poverty level. Someone like you with income between 300 and 400 percent of poverty ($34,470 to $45,960 in 2013) would be liable to repay no more than $1,250. It sounds like the liability to repay the premium is limited, although to someone making $11,000/year… $1,250 is still a very large sum. ---
**Author:** ![wevets](https://avatars.discourse-cdn.com/v4/letter/w/e9a140/32.png) [@wevets](https://boards.straightdope.com/u/wevets)\ **Post date:** [June 17, 2014, 3:52am UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/3 "2014-06-17T03:52:14Z")
Ooops - look at Table 2, Page 8 here: [http://www.cbpp.org/files/QA-on-Premium-Credits.pdf](http://www.cbpp.org/files/QA-on-Premium-Credits.pdf) In your example, with the individual making less than 200% of the Poverty Line, the individual would be responsible for paying back no more than $300 of the subsidy. Way better than paying back $1250. ---
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [June 17, 2014, 5:07am UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/4 "2014-06-17T05:07:41Z")
> [@wevets](#): > > Ooops - look at Table 2, Page 8 here: [http://www.cbpp.org/files/QA-on-Premium-Credits.pdf](http://www.cbpp.org/files/QA-on-Premium-Credits.pdf) > > In your example, with the individual making less than 200% of the Poverty Line, the individual would be responsible for paying back no more than $300 of the subsidy. Way better than paying back $1250. Ok then - why all the weeping and gnashing of teeth about the “hole” into which the people who earn less than the FPL fall in the states where they can’t go on Medicare? All they have to do is sign up for Obamacare, declare than they are going to earn just above FPL, then pay back the $300. ---
**Author:** ![TimeWinder](https://avatars.discourse-cdn.com/v4/letter/t/bcef8e/32.png) [@TimeWinder](https://boards.straightdope.com/u/TimeWinder)\ **Post date:** [June 17, 2014, 5:14am UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/5 "2014-06-17T05:14:48Z")
> [@Terr](#): > > Ok then - why all the weeping and gnashing of teeth about the “hole” into which the people who earn less than the FPL fall in the states where they can’t go on Medicare? All they have to do is sign up for Obamacare, declare than they are going to earn just above FPL, then pay back the $300. Because most people aren’t willing to commit intentional, easy-to-prove fraud, just to obtain a benefit to themselves? How do they then answer the audit question: “Based on what information did you make your original earnings claim?” Or maybe just because the whole point of the original law was to help these people, and the fact that they can jump through a bunch of hoops in order to be marginally less screwed by their vindictive state governments doesn’t mitigate that? ---
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [June 17, 2014, 5:17am UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/6 "2014-06-17T05:17:00Z")
> [@TimeWinder](#): > > Because most people aren’t willing to commit intentional, easy-to-prove fraud, just to obtain a benefit to themselves? How do they then answer the audit question: “Based on what information did you make your original earnings claim?” “Because I expected to earn more this year than last year”? It’s not fraud. It’s optimism. I always expect to earn more next year than last year. ---
**Author:** ![wedgehed](https://avatars.discourse-cdn.com/v4/letter/w/8edcca/32.png) [@wedgehed](https://boards.straightdope.com/u/wedgehed)\ **Post date:** [June 17, 2014, 3:13pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/7 "2014-06-17T15:13:27Z")
What happens to the insurance premiums in the next tax year? ---
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [June 17, 2014, 3:35pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/8 "2014-06-17T15:35:11Z")
> [@wedgehed](#): > > What happens to the insurance premiums in the next tax year? AFAIU, for next year you again estimate what your income would be. And can be optimistic about it. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [June 17, 2014, 3:47pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/9 "2014-06-17T15:47:28Z")
At a certain point, it’s not a matter of your optimism, it’s a matter of whether the judge or jury thinks it is fraud not optimism. (This assumes anyone would prosecute for this exaggeration.) ---
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [June 17, 2014, 4:02pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/10 "2014-06-17T16:02:54Z")
> [@md2000](#): > > At a certain point, it’s not a matter of your optimism, it’s a matter of whether the judge or jury thinks it is fraud not optimism. (This assumes anyone would prosecute for this exaggeration.) Of course no one would prosecute. Thinking/hoping you would earn more than $11500/year is hardly a wild flight of imagination. ---
**Author:** ![CannyDan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cannydan/32/548_2.png) [@CannyDan](https://boards.straightdope.com/u/CannyDan)\ **Post date:** [June 17, 2014, 4:12pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/11 "2014-06-17T16:12:59Z")
Huh. So low income people should just game the system to overcome a problem caused by states refusing the Medicaid expansion? I wonder how that will be played in the media if it becomes common practice. I’m seeing a new twist on \*“OMG welfare queens!!” \* Somehow this just doesn’t look like a sterling idea. ---
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [June 17, 2014, 4:20pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/12 "2014-06-17T16:20:06Z")
> [@CannyDan](#): > > Huh. So low income people should just game the system to overcome a problem caused by states refusing the Medicaid expansion? > > I wonder how that will be played in the media if it becomes common practice. I’m seeing a new twist on \*“OMG welfare queens!!” \* Obamacare makes welfare queens of more than half of its subscribers. A few more won’t make a difference. ---
**Author:** ![wevets](https://avatars.discourse-cdn.com/v4/letter/w/e9a140/32.png) [@wevets](https://boards.straightdope.com/u/wevets)\ **Post date:** [June 17, 2014, 4:20pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/13 "2014-06-17T16:20:21Z")
So let me get this straight. Those who advocate Medicaid expansion require no poor people to lie to get health insurance. **Terr** advocates poor people lying to get health insurance instead of the Medicaid expansion. And we’re supposed to believe that **Terr** ’s solution is the more reasonable way to set up rules for health insurance? And what is this doing in GQ if it’s not really about the question in the OP? It reads like a stealth political diatribe. ---
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [June 17, 2014, 4:29pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/14 "2014-06-17T16:29:50Z")
> [@wevets](#): > > So let me get this straight. Those who advocate Medicaid expansion require no poor people to lie to get health insurance. **Terr** advocates poor people lying to get health insurance instead of the Medicaid expansion. Nope. No lying involved. You estimate your income for next year. Optimistically. > [@](#): > > And we’re supposed to believe that **Terr** ’s solution is the more reasonable way to set up rules for health insurance? And what is this doing in GQ if it’s not really about the question in the OP? It reads like a stealth political diatribe. I asked the question because I didn’t know the answer. I think that’s a good reason to ask the question, don’t you? ---
**Author:** ![wevets](https://avatars.discourse-cdn.com/v4/letter/w/e9a140/32.png) [@wevets](https://boards.straightdope.com/u/wevets)\ **Post date:** [June 17, 2014, 4:36pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/15 "2014-06-17T16:36:43Z")
> [@Terr](#): > > Nope. No lying involved. You estimate your income for next year. Optimistically. That’s not how abverbs work. They modify nouns, not turn farce magically into honesty. > [@](#): > > I asked the question because I didn’t know the answer. I think that’s a good reason to ask the question, don’t you? Right after you got the answer to the question you launched into a GD/IMHO-style suggestion of unethical and possibly illegal conduct to get health insurance. I can’t see how that’s GQ territory. ---
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [June 17, 2014, 4:41pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/16 "2014-06-17T16:41:49Z")
Found an article dealing exactly with this question: [http://www.khi.org/news/2013/aug/12/estimating-maneuver-could-help-more-people-gain-ob/](http://www.khi.org/news/2013/aug/12/estimating-maneuver-could-help-more-people-gain-ob/) ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [June 17, 2014, 5:53pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/17 "2014-06-17T17:53:28Z")
Obamacare doesn’t do any of this. Sates that declined to expand their Medicare to cover those below the AHC level force people to choose honesty or cagey optimism. Congress that refuses to pass corrective legislation once the Supreme Court clarified the rules perhaps also shares the blame. Both those states and congress know there is a problem, have the ability to fix it and, according to the Supreme Court decision, it is their respective power and responsibility to address it - supply Medicare of your own volition, or reduce the subsidy limit, or let people die on the sidewalk for lack of coverage. I like being in Canada. ---
**Author:** ![wedgehed](https://avatars.discourse-cdn.com/v4/letter/w/8edcca/32.png) [@wedgehed](https://boards.straightdope.com/u/wedgehed)\ **Post date:** [June 17, 2014, 6:05pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/18 "2014-06-17T18:05:04Z")
I wonder how the numbers would work if the person over-reported their actual income (say using a Schedule C to report income from doing fictional yard work). Could the personal exemptions, standard deduction, EIC, etc. keep the tax liability low enough to make things work? Which raises the question, is it a crime to over report your income or under report your deductions in order to reach a desired income level? ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [June 17, 2014, 7:06pm UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/19 "2014-06-17T19:06:12Z")
> [@wedgehed](#): > > Which raises the question, is it a crime to over report your income or under report your deductions in order to reach a desired income level? Yes. You can read the fine print on the income tax signature, but you’re basically asserting that the information is complete and correct to the best of your knowledge. There are, however, some enormous gray areas that you won’t find a good answer for, especially when the issue is omitting expenses. For example, the IRS requires that you document mileage expense with a log - technically, it is not sufficient to use an estimate. Without the log, you’re not allowed to claim the deduction. But the IRS due diligence guidance for EIC claimants with insufficient records says that you must use an estimate. These kinds of things are not going to get sorted out until someone feels like challenging it in court. ---
**Author:** ![rsa](https://avatars.discourse-cdn.com/v4/letter/r/839c29/32.png) [@rsa](https://boards.straightdope.com/u/rsa)\ **Post date:** [June 19, 2014, 3:19am UTC](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957/20 "2014-06-19T03:19:40Z")
> [@md2000](#): > > [snip] > > - supply Medicare of your own volition, or reduce the subsidy limit, or let people die on the sidewalk for lack of coverage. > > I like being in Canada. There is a major and growing problem of rural hospitals closing because of the high number of uninsured patients. People are dying unnecessarily right now. Some Republican governors are having to reconsider their rejection of Medicaid expansion because of this. [Next page](https://boards.straightdope.com/t/question-on-obamacare-subsidies/690957.md?page=2)