In an effort to prevent an ObamaCare “train wreck” — as retiring Sen. Max Baucus (D-Mont.) described the law’s impending implementation — and forestall future repeal efforts, the Obama administration has just opened the door to potentially widespread fraud by making it possible for people to obtain health-insurance subsidies for which they are ineligible under the law.
It all started on July 2, when the administration announced that it would delay the employer mandate until 2015. That created a major problem for the state insurance exchanges. In order to qualify for a subsidy when buying insurance on an exchange, an individual must attest that his employer is not offering him “affordable” coverage — that is, coverage that costs him no more than 9.5 percent of his household income. But if employers are now released from the mandate and its reporting requirements next year, there will be no way for exchanges to verify that individuals applying for subsidies are actually eligible for them.
The administration solved this dilemma in the same way it has solved so many other problems with ObamaCare. Three days later, when even fewer people were paying attention, it quietly ruled that exchanges could simply dispense with the verification process and hand out subsidies based on applicants’ say-so.
“For eligibility determination for insurance affordability programs that are effective before January 1, 2015, … the Exchange may accept the applicant’s attestation regarding enrollment in an eligible employer-sponsored plan … without further verification,” reads the final rule.
On top of that, although the subsidies themselves are supposed to be tied to income, the administration also ruled that, for the most part, exchanges need not verify that applicants are earning the amount of money they claim. Exchanges now only have to audit a “statistically significant sample” of applicants; for everyone else, “the Exchange may accept the attestation of projected annual household income without further verification.”
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