June 17 2014

Administration to ObamaCare Enrollees: Prove or Pay

Patrice J. Lee

The Obama Administration’s latest outreach effort on healthcare is not to enroll more Americans in ObamaCare but to get those who signed up to prove that they deserve the coverage and subsidies they are enjoying.

As we reported not too long ago, some two million ObamaCare enrollees have discrepancies between the information they reported on their applications and what other federal agencies have on file for them. The rampant discrepancies are particularly around income and immigration status.

This is what happens when haste and incompetence meet a priority of enrollment and not accuracy. Last fall, the federal ObamaCare website healthcare.gov launched as a broken mess. One of the important features that would verify eligibility for coverage and subsidies was never built. The government should have developed a system to scan documents and transfer information automatically into electronic files that could then be sent to the health insurers. Instead, contractors had to type in the information and insurers were forced to process paperwork manually, which is in itself a great opportunity for errors.

This all presented an opportunity for applicants to fudge their applications and secure tax-payer funded subsidies. With no way to verify, they might just get away with it – until now. Through mail, email, and texts Health and Human Services is reaching out to hundreds of thousands of new enrollees telling them that, if they don't send in the needed documents they’ll risk losing their marketplace coverage or subsidies.

Finally, the Administration is making verification a priority. Unfortunately, it means that for months some applicants have enjoyed more generous subsidies than they deserve.

The New York Times reports:

More than eight out of 10 people who selected health plans through the exchanges from October through mid-April were eligible for subsidies, including income tax credits. So far this year the federal government has paid out $4.7 billion in subsidies, and the amount is expected to total $900 billion over 10 years.

Since June 1, the government has notified hundreds of thousands of people that “the information in your application doesn’t match what we found in other records.” Accordingly, the notice says, “you need to follow up as soon as possible and provide more documents to make sure the marketplace has the correct information.”

Executives at Serco, the federal contractor, said that technical problems with HealthCare.gov had limited their ability to investigate discrepancies.

Until late May, a Serco executive said, the company had to rely on “manual processes” to resolve conflicts between information provided by consumers and information in government databases.

Can we say better late than never? It’s not acceptable that hard-earned tax-payer dollars have been erroneously doled out by the Administration to lure Americans into ObamaCare. It’s taken the Administration how many months to make accuracy a priority? It’s questionable whether this would even be an issue if not for the intrepid and vigilant voices that decried the potential for abuse and lack of oversight.

For those signups who don’t produce accurate information or who are found to be claiming more than they should, it will be a wake-up call to see what they really should be paying and a big shock if they have to pay it back – and they should be required to.

It also exposes how unaffordable ObamaCare really is. A law meant to grant coverage to the uninsured at low costs is in fact just an overpriced new government subsidy program that distorts the marketplace on the backs of all taxpayers.

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