Topics: Barack Obama

Income verification for Obamacare gets watered down by Senate and House

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Beltway Confidential,Philip Klein,Barack Obama,Obamacare,Senate,House of Representatives,Health and Human Services,Health Care,Tom Coburn,Kathleen Sebelius,Government Shutdown

Though the House and Senate haven’t yet found a way to resolve the ongoing budget impasse, both sides now agree that a final deal should involve a measure dealing with income verification of applicants for insurance coverage through President Obama’s health care law.

But the provision presently being discussed has much less bite than an income verification idea I first proposed months ago as a potential demand Republicans could make in the budget wars.

First, some background.

In July, the Department of Health and Human Services delayed a key provision in the health care law intended to verify that individuals were accurately reporting their income when seeking federal subsidies to purchase health insurance through Obamacare.

The verification procedure would have involved making multiple large federal and state databases seamlessly communicate with one another.

But HHS determined creating this verification process was “not feasible” by Oct. 1, the scheduled opening date of the government-run insurance exchanges.

After HHS made the announcement, I argued that this created a huge opening for Republicans. By insisting that all the anti-fraud measures be implemented before doling out subsidies, Republicans could effectively delay a major portion of the law indefinitely because it wasn't clear when the Obama administration would actually be able to put its system in place.

Based on how the first two weeks of Obamacare’s implementation has gone, this was probably an accurate assumption.

Even if Democrats didn’t ultimately agree to this, I posited, the fight would provide Republicans with an opportunity to highlight the massive potential for fraud within the program.

Democrats would be forced to explain why they were so eager to dole out hundreds of billions of dollars of subsidies to individuals without putting in place the anti-fraud measures that were part of the law they voted for and support. I proposed a mantra for the GOP: “No Subsidization Without Verification.”

Soon, Rep. Diane Black, R-Tenn., introduced the No Subsidies Without Verification Act, which passed the House in September and was taken up by Sen. Tom Coburn, R-Okla., in the Senate. (Black and Coburn have a joint op-ed on the matter in National Review)

When reports started surfacing that income verification was part of the emerging deal in the Senate, it surprised me that Democrats would go for it, so I assumed it must have been watered down from what I had written about and what Black had proposed.

And that assumption is correct. A senior GOP aide tells me that the current House proposal unveiled Tuesday morning has the same income verification provision as the Senate proposal that emerged on Monday.

Instead of making sure that proper income verification procedures are in place before the federal government gives out any subsidies, the version currently being discussed would simply ask Secretary of Health and Human Services Kathleen Sebelius to certify that proper measures are in place. At that point, the government can start releasing subsidies.

Assuming that Sebelius makes that certification decision without breaking a sweat, the program will be subject to an inspector general audit.

But as with previous independent reports -- such as the one finding that Sebelius broke the law governing political activity by cabinet employees -- even an embarrassing audit is likely to cause a few days of bad press (perhaps a bit more in the conservative media) and then she'll just move on.

I never thought Republicans should have made financing the government contingent upon Obama agreeing to defund his signature law, which is why I had initially proposed the idea of focusing on fraud and then reaching a deal to avoid a shutdown.

Right now, Republicans are in an even worse strategic position than they were then, so I acknowledge that conservatives need to be realistic about what a final deal will look like.

But at the same time, let’s not kid ourselves about what the current formulation of the income verification provision will and will not accomplish.

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