Looking to draw more blood from President Obama’s health care law, House Republicans voted Wednesday to require Americans who are set to collect too much subsidy money in the insurance exchanges to pay back every dime - a move that could kick thousands of American out of the exchanges.
Mr. Obama and Democrat have twice before agreed to raise the limits on how much Americans must return if they’re overpaid, but Democrats say that the newest proposal by Republicans to claw back all overpayments goes too far and could severely undercut the law’s major goal of extending coverage to Americans who can’t obtain it from an employer.
“This continues their assault on affordable health care and would cause 350,000 more Americans to lose access to quality,” said Rep. Fortney Pete Stark, California Democrat, citing an estimate by the Joint Committee on Taxation. “You guys made the decision to stick the costs of this package to people with low and middle incomes.”
The debate came as Republicans scouted for savings demanded by the budget they passed last month. GOP lawmakers on the Ways and Means Committee turned to a favorite target: the Affordable Care Act. By requiring Americans to pay back all of the overpayments, the GOP could raise $44 billion to help meet the targets laid out in the spending plan of Rep. Paul Ryan, Wisconsin Republican.
And it’s also a swipe at the new system of exchanges with federal subsidies where millions of Americans are expected to enroll in coverage and which Republicans charge will drain the federal coffers.
If Americans receiving subsidies have an unexpected change in their eligibility in the middle of the year - perhaps because of finding a job or losing a family member - they only have to pay some of it back under current rules.
But under the new proposal, individuals and families could find themselves owing the government thousands of dollars at the end of the year.
“That makes no sense, it’s like making a family pay back the unemployment compensation they received as punishment for finding a job,” said Rep. Joseph Crowley, New York Democrat. “My colleagues on the other side are taxing success and penalizing work.”
Under the proposal, a family of four earning $87,500 could expect to pay back as much as $6,805, according to subsidy estimates by the Congressional Budget Office.
The debate Wednesday morning quickly turned into an argument over whether the repayments count as raising taxes. Democrats accused Republicans of breaking their famous pledge to conservative activist Grover Norquist to not vote for tax increases, while GOP lawmakers fired back saying they are just making sure Americans pay back money that isn’t theirs.
“What we’re doing is helping to tighten up a process and it’s no different than if we receive an overpayment from our bank - the bank is going to get that payment,” said Rep. Geoff Davis, Kentucky Republican. “We’re being fair and just at the same time.”
To try to prove their point, Republicans submitted into the record a letter from Mr. Norquist saying the provision was not a tax. But Democrats insisted that requiring low and middle-income Americans pay back potentially thousands of dollars in subsidies isn’t fair.
“To the people up on this dais, 100 bucks is nothing, but to people making 50 grand who are just barely making it and then we stick it to them just when something goes good for them is simply not the way America oughta be,” said Rep. Jim McDermott, Washington Democrat.
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