IRS Makes Half-Billion Dollar Obamacare Error

Ever since President Obama introduced the Affordable Care Act, Obamacare has been plagued with a disastrous launch, confusion, web problems, Secretary Kathleen Sebelius resignation, fraud, and 40% insurance rate increases. The list goes on and on.  Now add a new one.

A new scandal has now hit Obamacare, with a government probe revealing the IRS paid $572 million in excess Affordable Care Act tax credits and sent the wrong forms to over half a million Americans. According to a report released by the Treasury Inspector General for Tax Administrations, this was all due to a computer programming error.


The Washington Free Beacon reported the Tax Credits were created to assist low or medium-income individuals and families to purchase health insurance in the marketplace.

After the mistake was discovered, the Center for Medicare and Medicaid Services said that it would send corrected 1095-A forms and urged the affected individuals to hold off filling out their forms. However, the Treasury estimated that 50,000 of these individuals had already filled out their tax returns as of February 2015.

The Treasury Department announced that people who had already completed their tax returns did not have to correct the errors by filing an amended tax return and stated that they would not seek to recoup the excess payments.

“Treasury [Department] stated that the IRS would not pursue action to recoup excess PTC [Premium Tax Credit]  these taxpayers may have received as a result of the error.”

Curtis Kalin, a spokesman for the watchdog group Citizens Against Government Waste commented:

“This is par for the course with Obamacare. Even after years of work and billions of tax dollars spent, this law again and again fails to prevent the prodigious waste of Americans’ money,”

“There must be an effective system in place to track where subsidies have been sent and to whom. That is one of the most basic safeguards against waste and fraud. Taxpayers deserve the assurance that their money isn’t being hopelessly squandered, especially when there are commonsense ways to prevent it.”

As if this isn’t bad enough, it gets worse…

  • Health and Human Services Department’s inspector general report that found the federal website for applying for coverage on the exchanges didn’t accurately vet each enrollee for items such as citizenship, household income and family size during the law’s first sign-up period, meaning some people may not have qualified for benefits they received last year.
  • The inspector general also found that the administration was too generous in deciding that consumers made a “good-faith effort” to extend the 90-day period for resolving inconsistencies between their applications and government data sources.

Top Republicans hoping to repeal Obamacare say the over payment issue is another symptom of a confusing law that puts the burden on low and middle income Americans and is proving susceptible to fraud.