All Trust, No Verify At HHS

Sen. Mike Johanns and Sen. Jerry Moran U.S. Senators from Nebraska and Kansas
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The problems with the implementation of the Affordable Care Act have been well documented. A glitch-laden website, wave after wave of delays, massive uncertainty, and a string of broken promises are clearly visible symptoms of this flawed law. What has also become extremely concerning are the issues occurring behind the scenes — issues the Department of Health and Human Services claimed had been fixed — that threaten to create more pain for individuals and families.

Former Office of Management and Budget Director Sylvia Mathews Burwell recently replaced Kathleen Sebelius as Secretary of HHS. Along with a new office, she is inheriting the fallout from the marred Obamacare rollout and new information that important safeguards needed to process applications have yet to be built.

Recent revelations suggest HHS may be hemorrhaging taxpayer dollars because the systems required by law to verify consumers’ eligibility for Obamacare subsidies do not exist. As a result, hundreds of thousands of Americans may be receiving tax credits for which they do not actually qualify. Others may not be receiving the subsidies allowed under the law to help pay for health insurance. As Ranking Members of the Senate Appropriations Subcommittees that oversee HHS and Internal Revenue Service (IRS) spending, we are very concerned that the administration is failing to protect taxpayer dollars from waste and abuse.

Consumers attempting to enroll in Obamacare exchange health plans are required to submit their income level, citizenship, and immigration status, which may qualify them for tax credits and other cost-sharing reductions to obtain coverage. The initial round of these tax credits began in mid-January 2014. But according to recent media reports, more than two million of those applications contain data that is not consistent with other federal records, and the government currently does not have a dependable system in place to address the discrepancies.

The administration has no way of knowing the amount of taxpayer dollars going to ineligible consumers, or how many Americans were denied assistance they were eligible for under the law. One thing is clear: When it comes to ACA errors, the stakes are high. According to the Congressional Budget Office, the ACA’s insurance coverage provisions are expected to cost $36 billion in taxpayer dollars in 2014 alone. More than $1 trillion is projected to go toward exchange subsidies and related spending over the next decade. The Kaiser Family Foundation estimates the average ACA tax credit to be about $2,700 per family this year.

It is disturbing to think that any government official would knowingly proceed with implementing such a costly law without a robust, reliable verification system, so when the administration issued a rule rescinding requirements designed to safeguard taxpayers, Congress acted to address this problem. This final rule, issued by HHS last summer, disregarded the ACA requirement that exchanges verify consumers’ income and indicated the government would “accept the applicant’s attestation [regarding eligibility] without further verification.” In response, Congress passed legislation requiring a stringent verification process to be in place before tax credits were issued.

In early January, HHS Secretary Kathleen Sebelius assured Congress that “the Marketplaces have implemented numerous systems and processes to carry out these verifications” to determine eligibility for premium subsidies such as tax credits and cost-sharing reductions. So, why are more than two million applications in question while the government struggles to sort out inconsistencies? And, if the administration is able to identify irregularities, why are tax credits being distributed to potentially hundreds of thousands of Americans who do not actually qualify for them?

Whether this is the result of the administration’s race to bolster enrollment numbers by scaling back requirements, or simply another example in a long list of systemic failures, the American taxpayer is being forced to foot a hefty bill for a broken law. This administration’s push to implement the ACA, despite a minefield of flaws and the outright absence of necessary safeguards, is creating a greater burden for taxpayers as credits are doled out despite stacks of unresolved applications.

Additionally, those who unintentionally understated their income and received credits may face unexpected taxes down the road when the Internal Revenue Service seeks to recoup overpayments. As Americans struggle to make ends meet in the face of a sluggish job market and lingering economic uncertainty, a surprise Obamacare tax is the last thing these family budgets need.

Secretary Sebelius’ assurance to Congress that HHS was prepared to meet its eligibility responsibilities is also distressing in light of these revelations. We have expressed these concerns with HHS and IRS, and are awaiting an HHS Inspector General report detailing the effectiveness of procedures and safeguards in the ACA to prevent inaccurate or fraudulent health exchange applications. This report, which is due next month, should provide a greater understanding of how the agencies verify eligibility claims, if at all, and gauge HHS’ assertions that several verification systems are in place.

Americans deserve a government that is accountable to the people. This administration has evaded such accountability and it is unacceptable. New leadership at HHS means a chance to take meaningful actions to restore its tarnished reputation and take taxpayers off the hook for yet another Obamacare disaster.