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Black's Op-Ed in Investor's Business Daily: ObamaCare Honor System For Subsidies Will Invite Fraud

Jul 31, 2013 Issues: Health

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ObamaCare Honor System For Subsidies Will Invite Fraud

By Congressman Diane Black

Investor’s Business Daily

Wednesday, July 31, 2013

In a desperate attempt to try to salvage the president's disastrous health care law, the Obama administration recently announced it no longer plans to verify income status to determine eligibility for ObamaCare insurance subsidies next year.

Buried in 606 pages of final ObamaCare regulations quietly released over the July 4 holiday week, the Department of Health and Human Services stated:

"The exchange(s) may accept the attestation of projected annual household income without further verification ... the federal government will rely more heavily on consumers' self-reported information until 2015, when it plans to have stronger verification systems in place."

In other words, the new ObamaCare regulations only allow for random — rather than comprehensive — verification of income eligibility next year. Therefore, in the event that the president's cast of comedians and celebrities charged with selling the public on ObamaCare are unsuccessful in convincing enough young and healthy people to sign up for the exchanges, the administration has unlawfully crafted a backup plan:

Suspend comprehensive verification of income and in turn boost enrollment through fraud and abuse of taxpayer funded subsidies — racking up more debt for current and future generations.

More Than Theory

This sounds like a pretty raw deal for U.S. taxpayers, especially when the majority of Americans do not even support ObamaCare.

That is why I introduced H.R. 2775, the No Subsidies Without Verification Act, to stop the Obama administration's attempt to defraud taxpayers by requiring that accurate, real-time verification systems are put in place to determine eligibility before any taxpayer funded ObamaCare subsidies are handed out.

The costly effects of the administration's verification delay are not merely theoretical. Currently, numerous government welfare programs — all of which have more robust verification systems than ObamaCare's newfound "honor system" — are rife with significant fraud and abuse.

For instance, a study by the Rand Corp. found that Medicare and Medicaid fraud cost taxpayers approximately $98 billion in 2011 alone. Then there is the Earned Income Tax Credit, which the Treasury inspector general estimates between 21%-25% are administered fraudulently to people who are ineligible each year.

If you think these instances of fraud and abuse are bad, just wait until ObamaCare — a $1 trillion to $2 trillion new entitlement program — goes into full effect next year without its anti-fraud provisions in place.

The administration and its advocates have tried to rebuff the criticisms of the verification delay by citing the stiff penalties for falsifying one's income and the random sampling of applicants to determine eligibility (mind you, after subsidies have already been administered).

But with the enforcement watered down to the point of almost nonexistence, the penalties — harsh or otherwise — are meaningless.

Secondly, what evidence is there that the administration will use these so-called random samplings to actually try to prevent fraud and abuse, especially if by doing so, the survival of ObamaCare will be undermined?

Creating Dependents

From HHS Secretary Kathleen Sebelius' effort to coerce private donations for her ObamaCare nonprofit to hundreds of ObamaCare waivers issued to labor unions and political allies, the administration has a long track-record of manipulating or ignoring the law whenever it best serves its political objectives, and this verification delay is no exception.

This decision may very well serve the administration's political priorities in the long run by getting as many people — fraudulently or otherwise — dependent on government subsidies. However, the American public does not appreciate the government wasting its money, and that reality is apparently not completely lost on this administration, as they are clearly not promoting this verification delay.

It was no accident that this delay was not announced at a White House press conference or that it was quietly slipped into the federal register on the July 4 holiday week. In fact, the administration has gone to great lengths to keep the public in the dark about this decision.

Don't take my word for it: 1) try to find this decision on the federal register (good luck); 2) search "verification" on www.healthcare.gov (hint: no results will appear).

While the debate over government funding and efforts to cut spending ramps up in Washington over the coming weeks, no doubt so too will the calls for higher taxes from the president. But is the president really prepared to explain to the American people that he wants to raise their taxes in order to finance billions in fraud and abuse of ObamaCare subsidies?

If not, he should consider rethinking this verification delay. Otherwise, Congress must act to delay the subsidies until verification is in place, and congressional Democrats will then be forced to side either with the president of their party or their constituents who — like I said — do not appreciate it when government wastes their money.

Black, a Republican, represents Tennessee's 6th congressional district and serves on the House Ways and Means and Budget Committees. She has been a registered nurse for more than 40 years.

Click here to read Rep. Black’s op-ed on News.Investors.com

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