The abysmal failure of the launch of Obamacare’s insurance exchanges has received much attention. Proponents of Obamacare hope that website improvements and intense marketing will be able to salvage the effort. But an even more important discussion awaits once the exchanges are “operable.” Getting health insurance through Obamacare’s exchanges, especially with the assistance of tax credits, poses a great risk to the health and pocketbooks of those who apply.

To analyze the policy impact of participation in Obamacare’s exchanges, Josh Archambault and I have authored a new report (“Too Risky to Exchange?”) in which we point out:

The Obamacare exchanges are built around a complicated tax credit scheme that subsidizes a portion of enrollees’ annual premiums. Unlike other tax credits that are typically sent directly to the taxpayer, the Obamacare exchange tax credits are sent by the government to enrollees’ exchange insurance plans. Like so many government-run programs, the Obamacare exchanges are intrusive and complex. Worse, they are designed in such a way that any small change in an enrollee’s life circumstances can have a major impact on his or her premiums, deductibles, or access to care, and could even result in an audit from the IRS.

For example, did you know that if you take an advance credit or subsidy to purchase Obamacare-compliant health insurance policies, and happen to guess low on your estimated income, you are liable to pay back the entire subsidy? As our report details:

The tax credits themselves have received significant press attention as a “positive” of the Obamacare exchange. But little attention has been paid to the complicated nature of their implementation. Our lives are constantly in flux. Lower- and middle-class families rarely find themselves in static work and life environments, but that is exactly what Obamacare assumes. Even the most common and mundane life changes could significantly impact an individual’s financial situation if he or she decides to take the tax credit.

This report is a must-read for anyone considering participating in Obamacare’s exchanges, especially those considering taking an Obamacare IRS subsidy.