One of the biggest administrative hurdles facing Obamacare was the ambitious plan to verify the income and insurance status of applicants for federal health coverage subsidies. In theory, on Oct. 1 of this year, a prospective beneficiary of Obamacare was supposed to be able to visit a website like Orbitz, enter basic information, and wait as multiple state and federal government databases communicated with one another to confirm in real time the applicant’s income level, and then display the level of subsidy to which the applicant was entitled, if any. It was a level of technological sophistication unlike anything ever attempted by the government. Now, with less than three months to go before Obamacare’s health insurance exchanges are set to begin enrolling applicants, Obama’s Department of Health and Human Services is throwing up its hands. Just as it did with the employer mandate, the administration has announced it would delay the implementation of these anti-fraud procedures due to the administrative difficulty.
In a regulation released Friday and flagged by Washington Post reporters Sarah Kliff and Sandhya Somashekhar, the administration will now rely on self-reported data. You read that correctly. A man who earns $50,000 per year and gets insurance through his employer could log on to the new government website and say he earns $20,000 and gets no insurance through his employer, and the government would not even attempt to confirm that the information is accurate before forking over generous taxpayer subsidies. It’s a recipe for rampant fraud, which is already widespread in Medicare and Medicaid.
According to the rule as reported by Kliff and Somashekhar, “The exchange may accept the applicant’s attestation regarding enrollment in eligible employer-sponsored plan . . . without further verification” and “the Exchange may accept the attestation of projected annual household income without further verification.”
The authors’ note that if anybody is caught lying, that they would be subject to a $25,000 fine and forced to repay any excess subsidies they received. But just like a waiter who under-reports cash tips, it likely won’t be very hard to get away with lying on Obamacare forms.
With this news coming after the employer mandate delay announcement, the Obama administration has now openly conceded that it is in way over its head when it comes to implementing this unworkable law. Thus, the new strategy is to simply set up a mechanism to feed taxpayer subsidies to as many Americans as possible so that even if Obamacare is a complete train wreck, it will make enough people dependent on government to make repeal politically impossible. Republicans should seize on this immediately, and force the administration to defend a policy that would open the floodgates to fraud.