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Michael Hiltzik

Matt Drudge's crazy Obamacare tax adventure

Matt Drudge, whose news aggregation website, the Drudge Report, still has the power to drive huge traffic to articles he links to, also still has the power to make grownups at the White House (and maybe the IRS) sit up and go, "Huh?"

That's the conclusion one can draw from the weird exchange of claims and counterclaims he has engaged in during the last few days over the Affordable Care Act. Specifically, the terms and timing of the penalties the act imposes on individuals who don't acquire health insurance this year.

The saga started in January, when Drudge announced via Twitter that he had "opted out of Obamacare for life." He didn't reply to a follow-up question from the Washington Post about whether he meant he was giving up health insurance for good, or merely buying qualifying health insurance off the ACA insurance exchange, which wouldn't count as "opting out."

Then, last week, he announced (also on Twitter) that he had just paid his 2014 tax penalty for violating the ACA's individual coverage mandate: "Just paid the Obamacare penalty for not 'getting covered,'" he wrote. "I'M CALLING IT A LIBERTY TAX."

The curious thing there, as numerous progressive websites observed, is that the 2014 penalty isn't due yet. For those who aren't covered by insurance for at least nine months of the year, the penalty is a maximum of $285 per family or 1% of household income (above an exempted amount), whichever is higher. For taxpayers whose penalty will be calculated as a percentage of income, the maximum will be based on the average premium for a bronze ACA plan, the lowest tier; that figure hasn't yet been determined by the IRS, though it's expected to be around $3,600. The penalty will be due at the deadline for 2014 taxes--April 15, 2015.

Drudge's claim drew a tweeted, and tactlessly snarky, response from White House spokesman Jesse Lee: "Flat lie, no fee for previous year. Scary how much influence he once had."

That only drew further chatter from Drudge, who now claimed that taxes, and therefore the penalty, were already due for small businesses that pay quarterly estimated taxes. "We're there NOW, baby," he tweeted.

Again, weird. Businesses with fewer than 50 employees--and that appears to cover Drudge--are exempt from the ACA. No penalties due. If he mistweeted and meant to say that he paid his quarterly taxes as an individual or sole business proprietor, which is possible, then he might owe the penalty--theoretically.

The  problem there is that the IRS still isn't geared up to collect or account for the penalty--the agency is still drafting regulations--and hasn' certified the maxumum. If Drudge voluntarily paid a little extra in his estimated tax this quarter, the taxman wouldn't know what to do with it. Indeed, as talkingpointsmemo.com observes, the deadline for signing up for insurance to avoid the penalty is Monday, still days away. Technically speaking, no one in America has violated the individual mandate yet, Drudge or otherwise. (We asked Drudge to clarify but haven't heard back.)

So it's possible Drudge put a little bit extra in his estimated tax payment to cover a mandate he hasn't violated yet, the penalty for which hasn't been formally determined yet and the deadline for which payment is as much as 13 months away.

That's strange enough, but what's stranger is that the major issue has been lost in all the crosstalk. And that is: What's Drudge's point? He's been estimated to earn more than $1 million a year and possess a net worth many times that. If he wishes, he can self-insure his health, structuring the arrangement in a way that meets the ACA's technical requirements.

But is he recommending that his readers, or followers, take the same route of forswearing health coverage for life, just to score points against Obamacare? Why would anyone do that? How many critics of the ACA have chosen to leave themselves without health coverage to score a point against the law?

Drudge's odd little campaign resembles the advice that some right-wing extremists offered earlier this year that people simply refuse to buy health insurance under the ACA. Their goal was as nebulous as Drudge's. Was it to encourage people not to carry insurance at all? To refuse policies offered by the health insurance exchanges in favor of off-exchange plans, which might be much more expensive for many applicants because off-exchange plans aren't eligible for premium subsidies? Or what? Once they finished cutting off their nose to spite their face, how would they pay for the remedial surgery?

Reach me at @hiltzikm on Twitter, Facebook, Google+ or by email. MORE FROM MICHAEL HILTZIK

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