Federal, News, Regulation

House votes to prevent Obamacare subsidies without adequate eligibility check

170px-Seal_of_the_United_States_House_of_Representatives.svgThe House of Representatives voted 235-191 last week to pass the No Subsidies Without Verification Act, which would prevent Obamacare subsidies from being distributed until a complete eligibility verification system is implemented.

Under the current rules issued by the Department of Health and Human Services, federal health insurance exchanges are allowed some degree of flexibility in determining whether an individual or family is qualified for insurance subsidies—tax credits that can be used immediately to purchase health insurance, The Hill reports.

The bill was crafted in response to the rule issued by DHHS in July. Critics have said the rule would allow ineligible parties to receive insurance subsidies, thereby increasing taxpayer costs.

“We must protect taxpayer dollars to ensure that only those who are entitled to subsidies receive them, and this legislation corrects a serious error on the Administration’s part,” Rep. Dave Camp (R-Mich.) said. “Relying on a self-attestation system only encourages more waste, fraud and abuse. This is commonsense legislation, and I urge the Senate to take up this legislation and protect taxpayer dollars.”

The White House has said the bill is unnecessary, and President Obama has vowed to veto the legislation if it is presented to him for signature. The administration maintains that the rule has been misinterpreted, and the Centers for Medicare and Medicaid Services said the flexibility provided in the rule only applies to a limited group of individuals, according to The Hill.

Federal law mandates that certain individuals are eligible for subsidies if their employers do not provide an approved healthcare plan and if their income is below a certain level. The CMS said the rule would require federal and state exchanges to run an initial check on every applicant’s employment status and income.

The rule does, however, include flexibility for state-run exchanges to require further verification for individuals who claim their income is significantly lower than appears based on government data, The Hill reports.

The CMS also said that, in the event some ineligible people receive subsidies, the IRS can take them back the following year after the applicant’s actual income is verified.

“If there’s an inconsistency, the applicant pays back the excess,” Rep. Frank Pallone Jr. (D-N.J.) said, according to The Hill. “There is … 100 percent income verification and reconciliation on the back end.”

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