PPACA FAQ: What is the difference between a tax credit and a subsidy?

(Cross posted from Corrente)

Q: What is the difference between a tax credit and a subsidy?

Shorter answer: They apply at different income levels, you may have to pay back the credit but not the subsidy, the subsidy gets directlly credited to the insurance company you pick, instead of being figured at 1040 time, and the subsidy isn’t clawed back if your income changes.

Longer answer via Kaiser:

People with incomes between 100 and 400 percent of the federal poverty level ($11,490 to $45,960 for individuals in 2013) may be eligible for tax credits to reduce the cost of their monthly health insurance premiums.

In addition, people with incomes between 100 and 250 percent of the poverty level ($11,490 to $28,725) may qualify for cost-sharing subsidies that will bring down their deductibles, copayments and coinsurance. The subsidies also reduce the maximum amount they can be required to pay out of pocket annually for medical care.

Instead of waiting until tax time to claim the credit for the premiums on their return, people can apply to get it in advance, based on their estimated income for 2014. In that case, the state health exchange, or marketplace, will estimate the tax credit and send it directly to the insurer.

But there’s a catch. When April 15 rolls around, the Internal Revenue Service will reconcile the amount of the advance payments sent to the insurer with the taxpayer’s actual income. If a person’s income is higher than the estimate, the taxpayer will have to repay the difference.

But there’s some good news, too. If a person’s income is lower than estimated, the taxpayer will get a credit.

People who quality for the cost-sharing subsidies won’t face the same financial risk. The federal subsidies, which reduce consumers’ out-of-pocket costs, will be paid directly to insurers….

But with the subsidies, if a person’s income changes during the year, he or she won’t be responsible for any extra costs.

“It’s not a reconcilable tax credit, so consumers aren’t on the hook if their income changes,” says Christine Monahan, a senior health policy analyst at Georgetown Health Policy Institute’s Center on Health Insurance Reforms.

So complicated.

NOTE Of course, none of this complicated rigamarole would be needed with single payer. Single payer Medicare for All gets the middlemen out of the way so the health care system can get on with the business of delivering care. On the downside, single payer doesn’t given employment to thousands of trainers, accountants, tax specialists, brokers, or navigators, all of whom exist only to manage the completely unnecessary complexity ObamaCare deliberately creates. It’s as if we’re congratulating ourselves on buying bug spray for an infestation we should never have had to begin with.

Friday Fast: American school kids are out for the summer. Who feeds them?

This about control.

Certain conservative and otherwise intelligent voters are resentful that someone might be leeching off of them.  They all know someone who won’t pull his weight and that person becomes the template for how they see all poor people. For some reason, it never occurs to them that it might be the assholes on Wall Street who got massive bailouts and bonuses and a blank check in perpetuity to our Treasury department even after they blew up the world’s economy who are the biggest leeches of our tax dollars.  THOSE are the people whose behavior we should be trying to control and who are selfishly hoarding more money, goods and stuff they didn’t earn.  But we don’t hear the Republicans going after them.

No, it’s much easier to pick on people below you who can’t defend themselves.  Sauron’s Mouthpieces like Rush Limbaugh and Glenn Beck continue to feed a steady diet of resentment to Americans who are lucky enough to still have jobs and haven’t felt the full impact of the Little Depression- yet.

Let’s examine what they bought with those food stamps.  Let’s take whatever joy there is left in their world, the last bits of food security, and rip that away too because it feels really good when we accuse the parents of hungry children of being lazy, stupid losers.

Some voters need to graduate from fourth grade.

The rest of us can give up our lunch today and donate our lunch money to organizations that help feed Americans who are currently suffering from food insecurity.  That is especially important for growing school children.  Schools out for summer and if they aren’t getting a free or subsidized lunch, many of them are going hungry.

I don’t need Michelle Obama to lecture me on childhood obesity when so many kids can’t get enough to eat.  And having the Republicans selfishly and cruelly deprive these kids of food stamps is beyond evil.

Here’s the link to Feeding America.

Here’s the link to NoKidHungry.

Here’s the trailer for A Place at the Table: