Fraud? What, Me Worry?

While most of the public was focused on the Obama Administration’s announcement that the employer mandate under Obamacare would be delayed a year, another postponement was slipped in under the radar.  The administration decided to forgo, for the time being anyway, implanting the anti-fraud measures for those individuals that accept taxpayer-funded subsidies to purchase health insurance.  They were scheduled to take effect on Oct 1, 2013.

The Washington Post reported on July 5 that the Obama Administration “announced Friday that it would significantly scale back the health law’s requirements that new insurance marketplaces verify consumers’ income and health insurance status…Instead, the federal government will rely more heavily on consumers’ self-reported information until 2015, when it plans to have stronger verification systems in place.”  You can find the regulation announcing the change here.

So what does this mean?

You might recall individuals whose household incomes fall between 100% and 400% of the federal poverty level (FPL) will be able to obtain subsidies to help them purchase health insurance if they cannot get affordable insurance through their employer.  In 2013, for an individual or family of four, those figures are $11,490/$23,550 at 100% and $23,550/$94,200 at 400% of the FPL, respectively.

One of the things Obamacare was suppose to do is allow someone to simply log onto a website, like E-HealthInsurance, pick a health plan, and at the same time have their household income checked to see if they are eligible for a subsidy.

But as Philip Klein points out in the Washington Examiner, the government has never been able to construct or run such a sophisticated operation that allows federal and state data bases to communicate with each other about income level, figure out what the subsidy should be, and display it along with the insurance plan the consumer wishes to purchase.  He notes that with this new regulation allowing people to “attest” to their income level and whether they get affordable insurance or not from their employer just opens Obamacare to massive fraud.

For example, Klein points out that if a man earns $50,000 a year and gets insurance from his employer, he could simply log onto the government website and claim he makes $20,000 a year and gets no insurance.  For that effort, he would receive a generous subsidy, complements of the taxpayer.  Of course, if he is caught, he would be fined $25,000 and repay any excess subsidies.

But what are the chances he will get caught?  Remember, it is the IRS that will be validating whether the salary is correct or not.  Let’s also remember this is the same IRS that in 2011 sent 23,994 tax refunds worth a combined total of $46,378,040 to “unauthorized” alien workers that lived at the same address in Atlanta, GA.  This is the same IRS that paid out $12.1 million in fraudulent tax refund claims that were submitted using stolen names and Social Security numbers of 5,108 dead people.  Even more amazing, the same Electronic Filing ID number was used in each case yet the IRS computers did not catch it.  This is the same government that, since its inception, has been trying to stop fraud in the Medicare programs.  It is estimated there is $60 to $90 billion per year in Medicare fraud alone!

This is just another sign of many signs that grow more serious each day that Obamacare is not ready and never will be ready for Prime Time.  It is a law that will seriously damage what had been the best healthcare system in the world.  It is a law that will put our nation into a faster trajectory toward bankruptcy.

The Washington, D.C. “Masterminds” have failed.  It is time to repeal this law, before it is too late.