The IRS overpaid nearly $4 billion to Obamacare customers through tax credits last year, and because of the way the law is written it can’t even try to collect on a quarter of that, the Treasury Department’s inspector general reported this week.
All told, the Treasury Department paid out roughly $27 billion in Obamacare subsidies in the 2018 tax-filing season, with overages accounting for $3.7 billion of that. Only $2.7 billion was recaptured.
The $1 billion left over is small compared to the overall federal budget, but it is 20 percent of the president’s border wall funding request that’s spurred the current government shutdown.
Overpayments were built into Obamacare, with most people who buy insurance on the Affordable Care Act’s exchanges collecting subsidies through the IRS to help them afford their plan premiums.
The amount they get during the year is based on their expected earnings.
At the end of the year they’re supposed to square what they expected to earn with what they actually got, and since some of them saw higher incomes — through raises, promotions or better jobs — they have to repay the IRS.- READ MORE