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Obamacare’s Dishonor System
The Obama administration invites you to commit health-care-exchange fraud.

HHS secretary Kathleen Sebelius (left) with President Obama.

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Mona Charen

Perhaps you’ve heard the radio or TV commercials sponsored by the Department of Health and Human Services urging seniors to report instances of Medicare fraud. There’s a number to call, along with cheerful suggestions.

The intent here seems benign enough — saving taxpayer money by catching the dishonest. One might even be tempted to praise it, were it not for what the Obama administration is doing with the other hand — issuing an engraved invitation to commit fraud when signing up for the health-care exchanges.

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Obamacare is proving too unwieldy even for the greediest of big-government centralizers in the Obama administration. With only months to go before their Frankenstein was set to get its jolt of electricity in January 2014, they’ve announced a series of delays. The employer mandate, whereby businesses with 50 or more employees must certify that they are providing insurance that meets government requirements, will be delayed by a year.

When you design a Rube Goldberg health-care system with a thousand moving parts — subsidies, mandates, exchanges, reporting requirements, sliding scales, and varying eligibility for Medicaid, expanded Medicaid, and so forth — it doesn’t take much to bring the whole contraption to a halt. By delaying the employer mandate, the Obama administration undercut its own complex system for calculating people’s eligibility for health exchanges. In theory, it was supposed to be based on family income, family size, the lack of employer-provided insurance, eligibility for other government programs, and more. (For further edification, consult the 600-page rule HHS issued on July 5.)

Under the circumstances (and leaving aside the legal problems with delaying implementation by executive fiat), the logical solution might have been to delay the entire law for one year. Instead, the administration announced that people can sign up for the exchanges “based on the honor system.”

This outright encouragement of fraud is profoundly immoral and takes the country in precisely the wrong direction. As Nicholas Eberstadt details in A Nation of Takers, the availability of entitlements is changing the character of the nation (or at least of large swaths of it). America was founded and populated by people with a horror of dependency. “Although many Americans in earlier times were poor, . . . even people in fairly desperate circumstances were known to refuse . . . handouts as an affront to their dignity.”

Both Democrats and Republicans contributed to eroding the stigma associated with dependency, but Democrats were more likely to describe benefits as “rights” and to condemn all attempts to verify or narrow eligibility as heartless cuts.

Between 1979 and 2009, the unemployment rate went up and down, but the proportion of American households receiving means-tested government benefits has risen every single year. “By 2009,” Eberstadt writes, “the share of American families getting poverty-related entitlements was almost three times as high as the official poverty rate for families.”

The new American appetite for the dole is reflected also in the explosion of disability claims — and this is relevant to the fraud concerns with Obama’s exchanges. Between 1960 and 2010, the percentage of economically active 18- to 65-year-olds on disability increased from 0.65 to 5.6 percent. In 1960, only about 455,000 Americans received disability awards. In 2011, that number had jumped to 8.6 million, an 18-fold increase. For those who are interested in such things, Eberstadt notes that most of the disability fraud seems to be committed by whites.

Nearly half of all disability claims in 2011 were for “mood disorders” or musculoskeletal complaints (read back pain), two ailments that doctors cannot readily contradict. It may be that better diagnosis accounts for some of the change since 1960, but treatment has improved as well, and life expectancy has increased by nine years.

“Gaming and defrauding the entitlement system have emerged as a mass phenomenon in modern America, a way of life for millions . . . of men and women who would no doubt unhesitatingly describe themselves as law-abiding.” Eberstadt writes.

The invitation to sign up fraudulently for health-exchange subsidies issued by the Obama administration this summer is not just evidence of the unworkability of Obamacare; it’s one more step toward undermining the character traits that made America exceptional.

Mona Charen is a nationally syndicated columnist. © 2013 Creators Syndicate, Inc.



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