Nearly two in three Americans who bought subsidized health insurance on the Obamacare exchanges this year had to pay some of the federal dollars back, according to new data from H&R Block.
That's because they presumably collected more federal aid than their income qualified them for. In that case, consumers must either pay some of it back or — in most cases — the IRS will subtract it from their tax refund.
Policymakers have expressed concern that low-income people could struggle with paying back the subsidies — or suffer if their tax refunds are greatly reduced because of overpayments.
The average amount consumers owed back to the government was $729, cutting their potential tax refunds by almost one-third, said the tax preparation company.
On the flip side, one in four Obamacare recipients collected fewer subsidies than their income qualified them for. Those consumers saw their tax refunds boosted by an average of $425.
The figures differ from estimates released last month by the Kaiser Family Foundation, which projected that about half those buying subsidized Obamacare plans would owe a payback and half would be owed a refund.
The Obama administration and tax preparers have stressed the importance of people notifying the online insurance marketplaces of any changes in income or major life events as soon as possible, so their eligibility for subsidies can be accurately calculated. That can reduce the sum of money the IRS needs to reconcile at the end of the year.
"Our figures highlight the importance of estimating income as accurately as possible when applying for premium tax credits and notifying the marketplace with any life changes that impact annual household income or size," said Mark Ciaramitaro, vice president of H&R Block's healthcare services.
Enrollment in Affordable Care Act plans officially ended in mid-February, although those subject to a fine for being uninsured have until Friday to sign up.