EDITORIAL: Obamacare tax hit

Get ready for another Obamacare surprise. As if canceled policies, dropped doctors, higher premiums, higher deductibles and enrollment nightmares aren’t enough, millions of people who were supposed to be most helped by the law are about to be hit with a tax bill. As reported by The Wall Street Journal’s Stephanie Armour and Louise Radnofsky, as many as half of the 6.8 million people who received Affordable Care Act subsidies in 2014 may have to return some of that money to the government.

Ms. Armour and Ms. Radnofsky explained that enrollees were awarded subsidies based on estimates of their 2014 income, but millions of those estimates were wrong and resulted in subsidies that were too generous. Vanderbilt University assistant professor John Graves told The Wall Street Journal that, on average, the tax credits would be too high by $208, based on the applicants’ most recent tax returns.

So millions of people could face a tax bill that in some cases will be modest but could be as high as $2,500 for families at the upper end of the subsidy eligibility range. Some people may have to reimburse overpayments in full.

These are the people who were supposed to be least able to afford insurance. Equally as bad for these 2014 filers is the fact that no one — not even professional tax preparers — has any experience with the IRS forms that reconcile the subsidies. So lower-income earners will face the most complicated process in complying with Obamacare’s individual mandate, a process that is expected to force many of them to shell out even more money to have their returns professionally prepared.

These are not unintended consequences. When lawmakers create a new entitlement and put the IRS in charge of verifying Americans’ health coverage, no one can expect simplicity and efficiency. This tax season will provide one more reason for Americans to loathe Obamacare. And one more reason for the Republican-led Congress to deconstruct it.