Politics & Policy

An Obamacare Battle We Can Win

The House has passed legislation to require income verification before disbursing Obamacare subsidies.

Few in Congress have a lower opinion of Obamacare than we do, as medical professionals and legislators. We’ve seen firsthand how misguided federal policies can harm patients and impose enormous burdens on taxpayers.

When it comes to how to best oppose, reverse, and replace Obamacare, we share the view of the Wall Street Journal editorial board that an island-hopping campaign is better than an invasion of Japan. And one island the GOP has identified as worth taking is a requirement that individuals prove they’re eligible before receiving taxpayer-funded subsidies to purchase health insurance.

#ad#Fraud in health care is indefensible because it diverts scarce funds away from those who truly need benefits, while saddling our children with needless debt. Unfortunately, President Obama and some in Congress have left the door wide open to massive fraud as the new health-care law is implemented.

Since October 1, individuals have been trying (with great difficulty) to apply online for the health plans offered in Obamacare’s new exchanges, and for the subsidies attached. Starting January 1, 2014, taxpayers will foot the bill for anyone receiving Obamacare subsidies. Here’s the problem: Millions of Americans who claim to be eligible for a taxpayer-provided subsidy might not be.

Earlier this year, the administration admitted it was not even going to check if applicants were eligible for subsidies. Instead, it said it would rely on individuals to “self-attest” they are eligible for subsidies.

This reckless “honor system” would result in the administration’s doling out billions of dollars in subsidies without requiring any form of verification. Not since “no document” mortgages helped bring about an economic crisis has the federal government so blatantly invited a form of fraud that would hurt taxpayers and working families.

Under pressure, the administration backpedaled from its indefensible position and said it would try to verify individuals’ income and eligibility through the Department of Health and Human Services (HHS). However, given this administration’s record on the implementation of this law, missing dozens of deadlines that were required by federal law, we are skeptical it will keep this commitment.

Moreover, the law is written such that once that money goes out the door it’s gone for good. In their finite wisdom, lawmakers actually included a provision that caps the amount the federal government can recoup from an individual who receives a greater subsidy than the one for which he or she is otherwise eligible. The CBO has estimated that eliminating this cap on recapturing subsidy overpayments would save $43 billion over ten years. But this is a lowball estimate.

In fact, the Wall Street Journal noted that up to $250 billion in fraudulent subsidies could go out the door if Obamacare subsidies suffer from the same fraud rate as does the earned-income tax credit, 21 to 25 percent. That would be a quarter-trillion dollars in taxpayer funds down the drain that could not be used to shore up Medicare, Medicaid, and Social Security or ease the tax burden on working families.

The least we can do is prevent further waste of taxpayer dollars. Because Obamacare thwarts Uncle Sam’s ability to recover all identified overpayments, HHS should at least be required to check individuals’ eligibility before sending the checks.

We’ve introduced bicameral legislation in Congress that would fix this problem. Our plan would require the independent inspector general to certify that HHS has a system in place to verify eligibility for Obamacare subsidies before the money starts to flow.

The House of Representatives has already passed this bill, the No Subsidies Without Verification Act, with bipartisan support. The Democratic-controlled Senate Appropriations Committee has already unanimously passed legislation affirming its belief that the Obama administration should verify eligibility before giving out taxpayer-funded subsidies.

This is precisely the type of proposal that belongs in this month’s budget talks, because it is one both Democrats and Republicans can agree on. If the administration is confident its system will provide subsidies only to households that qualify, it should welcome independent confirmation of the program’s integrity.

On the other hand, if the administration is willing to allow billions of dollars in taxpayer-provided subsidies to individuals who lie about their eligibility, let it make that case. In our campaign to protect patients and taxpayers, this is an island we can take.

— Senator Tom Coburn, M.D., is a senator from Oklahoma, and Diane Black, R.N., is a representative from Tennessee.

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