The Daily Caller

The Daily Caller
U.S. Health and Human Services Secretary Kathleen Sebelius waits before testifying at the House Energy and Commerce Health Subcommittee on "Patient Protection and Affordable Care Act Implementation Failures: What U.S. Health and Human Services Secretary Kathleen Sebelius waits before testifying at the House Energy and Commerce Health Subcommittee on "Patient Protection and Affordable Care Act Implementation Failures: What's Next?" on Capitol Hill in Washington December 11, 2013. REUTERS/Gary Cameron (UNITED STATES - Tags: POLITICS HEALTH) - RTX16E1N  

Congresswoman: No plan to fight Obamacare subsidies fraud, security breaches

The congresswoman leading the charge to ensure Obamacare security blasted Health and Human Services (HHS) Secretary Kathleen Sebelius’ plan to guard against fraud and security breaches of Obamacare’s subsidies program, which Sebelius was forced to design to help end the government shutdown.

Sebelius’ plan “prohibits Americans from knowing what their health care costs will be” and fails to provide a “privacy and security plan” to prevent fraud and abuse that could cost taxpayers nearly $250 billion, Tennessee Republican Rep. Diane Black wrote in a letter to Sebelius provided to The Daily Caller.

Obamacare is set to distribute more than $1 trillion in taxpayer-funded subsidies, and the program is now wide open to fraud and abuse that will only be enforced by the IRS on a case-by-case basis after it occurs. Nearly $250 billion of fraud and abuse could result in the form of improper subsidies being doled out, according to an estimate cited by Black.

Rep. Black fought to pass legislation to ensure that Obamacare subsidies are not given until the incomes of people receiving them are reviewed to determine their eligibility for the handouts. Black’s efforts resulted in House passage of her No Subsidies Without Verification Act in September. A watered-down version of that bill ended up passing into law when Congress and the White House agreed to a budget deal in October to end the government shutdown. The deal called for a strict income monitoring provision, which was seen as the sole Republican victory in the deal.

The provision only required HHS to submit a report to Congress by the end of 2013 laying out a plan to fulfill the income monitoring requirement. Sebelius quietly sent in her report on the last day of the year. But now, after reviewing Sebelius’ report, Black said that HHS is leaving the door open to confusion and fraud.

“Prior to the launch of the Healthcare.gov website, the nonpartisan Government Accountability Office and Treasury Department Inspector General released warnings that the income verification system for issuing exchange subsidies was not completed. In fact, the system was said to be vulnerable to fraud and abuse for a program estimated to issue nearly $250 billion of taxpayer funds,” Rep. Black wrote in a Jan. 10 letter to Sebelius.

The federal government will potentially hand out taxpayer subsidies to people committing fraud and the mistakes will only be “later reconciled,” meaning that a lengthy IRS process will target fraudsters after they already get their taxpayer handouts.