May 20 2014

ObamaCare Incorrectly Doles Out Taxpayer Money on Subsidies

Patrice J. Lee

What happens when you hastily throw together a massive new government spending program and suspend authentication procedures? You end up with fraud and abuse of the system.

ObamaCare is meant to be modeled after the private marketplace, but it is increasingly looking just like other government entitlement programs that are subject to abuse with little will for oversight or enforcement against wrong-doing.

The federal government is paying out incorrect healthcare subsidies to more than one million Americans who signed up for ObamaCare. Apparently, a large proportion of signups listed incomes that differ significantly from their incomes on file with the IRS. It isn’t just those who -not surprisingly- underreported, but also those who over-reported their income.

Of the 5.5 million signups in the federal exchange, 3 million (or more than half) have an application containing at least one kind of inconsistency. Income inconsistencies are the most common occurring on 1.1 to 1.5 million applications out of the total, but applicants have only uploaded or mailed in about 650,000 pieces of “proof” — or about one inconsistency in six.

An authentication process should be able to confirm the discrepancy and alter any subsidies that applicants actually qualified for. Unfortunately, the Administration was hasty in building the healthcare.gov website and, perhaps, because they prioritized hitting their enrollment targets above accuracy, they never built verification systems. That may be coming in 2015 – we hope. And in the meantime, verification is back in the dark ages via pen and paper.

The Washington Post reports:

Because the computer capability does not yet exist, the work will start by hand, according to two people familiar with the plans. It will focus at first not on income questions, but on another roughly 1 million cases in which people enrolled — or tried to enroll — in health plans and ran into questions about their citizenship status. Throughout the sign-up period that ended earlier this spring , flaws in HealthCare.gov blocked many naturalized citizens or permanent legal residents, requiring them to submit immigration documents that are, like the income information, caught in a backlog.

This is not the only case where the Administration played fast-and-loose with verification for ObamaCare signups. March 31st was the deadline for open enrollment until the President unilaterally extended online enrollment for those having difficulty with the website. How do you prove difficulty? You don’t. He believes in the honor system, whether because he thinks all Americans are trustworthy, because it’s a lazy approach, or because it’s an easy way of opening up the flood gates for people into his healthcare insurance system.

Americans deserve to know that their hard-earned tax dollars are going to those who actually qualify for them. The U.S. House is taking up the cause. The Energy and Commerce Committee sent letters to outgoing Health and Human Services Secretary Kathleen Sebelius and three federal contractors — Accenture, CGI and Serco — asking for all documents relating to incorrect subsidy payments, as well as problems with enrollees’ immigration status. Accountability may be on the way.

As with any other entitlement program, the goal should be to ensure that those who really need help get it by tightening eligibility, not to entice Americans to scam the government.

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