On June 4, the Associated Press reported 2.1 million people, one out of four enrollees in the Obamacare exchanges, have data discrepancies in their applications that affect their subsidy and put their coverage at risk. A discrepancy means that the person’s health insurance exchange application doesn’t match certain details that the federal government has on file, such as income, citizenship, or immigration status. All these factors affect how much people must pay to get subsidized health insurance through an Obamacare exchange – or if they are eligible at all. According to the AP story, about 1.2 million applications have income discrepancies, 505,000 have immigration discrepancies, and 461,000 have citizenship discrepancies.
The Centers for Medicare and Medicaid Services confirmed the report in a blog post.
“The [Obamacare exchanges] checked to see that consumers are who they said they were, matching Social Security numbers, income and tribal status, among a host of other data points … But, while most information the applicant provided lined up, sometimes a name or data point didn’t match up right away with existing records. For example, a consumer might have recently changed jobs, but the latest IRS tax return data and other data available to the [exchanges] didn’t reflect that change in income. In such cases, the law requires us to double and triple check this data in another way.”
The Obama administration’s claim that CMS is “double and triple check[ing]” the data is hard to believe. The Treasury Department’s inspector general for tax administration testified on April 30, 2014, that large portions of the data systems necessary to verify income and other eligibility requirements have yet to be built or tested.
Remember that in July 2013 the administration postponed a requirement that state insurance exchanges verify either people’s annual household income or that they get affordable insurance coverage from their employer. States were told they could just accept subsidy applications based on the honor system. A month later, Gary Cohen, former director of CMS’ Center for Consumer Information and Insurance Oversight, testified that CMS was going to be “sampling 100 percent” of people applying for coverage. People would have their income verified before receiving a federal insurance subsidy for health coverage.
Given the administration’s poor track record when it comes to missed deadlines, questions remained if it would keep this promise. So House and Senate Republicans introduced legislation requiring the HHS inspector general certify that a program to successfully and consistently verify household income be operational before any federal subsidies are issued. On September 10, 2013, the White House threatened to veto the House bill, saying it would delay “tax credits and cost-sharing reductions that will otherwise be provided to millions of Americans.” The White House even warned that the “legislation’s unnecessary pre-certification requirement would impede opening the Marketplaces on October 1st.”
Eight months later, on May 16, 2014, the Washington Post reported that “the government may be paying incorrect subsidies to more than 1 million Americans for their health plans in the new federal insurance marketplace.” The Continuing Appropriations Act, 2014 (Public Law 113-46) required the HHS secretary to certify that the Obamacare exchanges will verify people are eligible for subsidies before the money is released. Secretary Sebelius issued her certification to Congress in a letter dated January 1, 2014, detailing a wide range of measures the agency would use to protect the American taxpayer.
A growing body of evidence suggests Secretary Sebelius prematurely, or incorrectly, certified HHS had appropriate, effective, and functioning systems in place to verify people’s application information. Republican Leader McConnell, Senator Hatch, and Senator Coburn sent a letter on May 27, 2014, to the HHS inspector general asking him to examine reports that the Obama administration has failed to prevent improper subsidy payments. The 2014 CR mandated the HHS OIG submit a report to Congress no later than July 1, 2014, outlining the effectiveness of the HHS eligibility verification and certification performance, to stop inaccurate or fraudulent payments.
Health Care Headlines
Washington Post: “Senate confirms Burwell as new secretary of HHS” The Senate on Thursday confirmed Sylvia Mathews Burwell, the White House’s budget director for the past year, as the 22nd secretary of the Department of Health and Human Services. On a bipartisan vote of 78 to 17, senators approved Burwell to lead the government’s largest domestic department, ending a quick confirmation process that was devoid of the bitter partisanship surrounding the 2010 Affordable Care Act and the changes it is bringing to the U.S. health-care system.
Associated Press: “Now application ‘inconsistencies’ vex health law” A huge new paperwork headache for the government could also be jeopardizing coverage for some of the millions of people who just got health insurance under President Barack Obama’s law
Investor’s Business Daily: “Unsubsidized Young Pick ObamaCare Catastropic Plans” All the attention has been on who’s signing up for ObamaCare exchange plans, but what happens in the off-exchange market also matters.
Roll Call: “Fiscal Diagnosis Only Gets Tougher for Health Care Law” For Democratic lawmakers who were hesitant to sign onto the sweeping 2010 health care law, one of the most powerful selling points was that the Affordable Care Act would actually reduce the federal budget deficit. Four years after enactment of what is widely viewed as President Barack Obama’s key legislative achievement, however, it’s unclear whether the health care law is still on track to reduce the deficit or whether it may actually end up adding to the federal debt. In fact, the answer to that question has become something of a mystery.