By Julian Pecquet - 04/18/12 02:26 PM EDT
A proposal from House Republicans that would require people to reimburse subsidies they're not entitled to under the healthcare law would result in 350,000 fewer people gaining insurance, according to the chief of staff for the Joint Committee on Taxation.
Democrats seized on the testimony from Thomas Barthold to assail the plan, which Republicans say would cut the deficit by $43.9 billion.
And Rep. Pete Stark (D-Calif.), the top Democrat on the Health subcommittee, introduced an amendment that would prevent the provision from applying in years when the secretary of Health and Human Services determines that it "will or is likely to result in a decrease in the number of insuranced individuals during the year." It failed along party lines.
Republicans emphasized that no one would lose the subsides they're entitled to under the healthcare reform law beginning in 2014.
"The premium assistance credit remains as under current law," Barthold said.
"In certain circumstances under current law, recipients are permitted to keep taxpayer-funded health insurance exchange subsidies to which they were not entitled. The bill before us today protects taxpayers by requiring those receiving higher subsidies than allowed under law to return any overpayments," said committee Chairman David Camp (R-Mich.). "As [Health and Human Services] Secretary [Kathleen] Sebelius has previously said, requiring the return of exchange subsidy overpayments 'mak[es] it fairer for recipients and all taxpayers.' "
Four liberal advocacy groups — Families USA, Health Care for America Now, the Main Street Alliance and the National Women's Law Center — wrote to the committee to warn that the GOP plan would eliminate the "safe harbor" provision of the law.
"The provision would raise taxes on families whose mid-year changes in income or circumstance cause a yearend recalculation of their premium tax credit," Health Care for America Now and the small-business group Main Street Alliance wrote in a joint letter.
"This proposal removes the repayment cap and jeopardizes the financial security of middle-income families who may face unexpected lump-sum repayments, even when income changes have been reported in an accurate and timely way. Fear of repayment will cause hundreds of thousands of families to refuse the premium tax credit assistance and go uninsured and unprotected against potentially catastrophic health problems and medical bills. Over time, the consequence will be fewer families with insurance and higher premiums for everyone else buying health insurance coverage."
The conservative Americans for Tax Reform countered with a letter supporting the provision.
"While this may be scored by the Joint Tax Committee as an increase in revenues, it is assuredly not a tax increase," ATF President Grover Norquist wrote. "This money was advanced to the taxpayer in error, based on outdated tax return information about the taxpayer. No one is at fault, but it is hardly a tax increase for taxpayers to benefit only from those tax provisions that the law allows them."