Republicans are hitting the Obama administration over a weekend report that at least one million of those receiving Obamacare subsidies aren’t being paid the right amount.
The House Energy and Commerce Committee wrote Monday to outgoing Health and Human Services Secretary Kathleen Sebelius and three federal contractors — Accenture, CGI and Serco — asking for all documents relating to incorrect subsidy payments, as well as problems with enrollees’ immigration status.
The Washington Post reported Saturday that the federal government may be paying out incorrect health-care subsidies to over one million Americans. A large proportion of those who have signed up for coverage through Obamacare exchanges listed incomes that differ significantly from their incomes on file with the IRS.
Tennessee Republican Rep. Diane Black also took a swipe at the Obama administration Monday over the inaccurate payments.
“We knew that paying out subsidies without first confirming that someone was eligible would become a nightmare for American taxpayers, and these reports confirm our concerns,” Black said in a statement Monday. “Not only are taxpayers potentially on the hook for billions of dollars in fraudulent subsidy claims, but honest Americans who merely make a mistake filling out Obamacare forms might now be hounded years later for back taxes.”
The Obama administration announced last July that it wouldn’t be verifying any subsidy eligibility information throughout 2014, hoping to have verification systems in place by 2015 instead.
The House passed Black’s legislation to ban the Obama administration from issuing Obamacare subsidies without a working verification system, but the bill failed to make it past the Senate.
The absence of any verification systems for subsidies means that the federal government is currently accepting consumer testimonies about their income at face value and issuing insurance companies premium subsidies accordingly.
Administration officials reportedly are not sure what proportion of the discrepancies are overpayments or underpayments. Those who have been overcompensated will be expected to return the difference to the federal government in 2015.
The Washington Post reported that for the 8 million Obamacare sign-ups, federal contractors have found 4 million inconsistencies of any kind in Obamacare applications. Of those, 1.1 million to 1.5 million are discrepancies in income — the largest of any type of application issue. Just 650,000 customers have sent in their proof to address the problem.
In the past, the Obama administration has brushed aside concerns over its failure to establish a subsidy verification system, arguing that consumers’ self-attestation about their income would suffice because consumers would have to come clean in their tax filings next year.
The administration issued rules Friday establishing civil fines of up to $250,000 for intentionally providing false income information in order to receive Obamacare subsidies. The penalty for submitting incorrect information even without malicious intent could still cost up to $25,000, the Associated Press reported.
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