In a classic Friday news dump sandwiched between Independence Day and its holiday weekend, the Obama administration issued a 606-page final regulation on the Affordable Care Act, the contents of which make clear why such a day was chosen for its release, which was buried in the Federal Register.
For starters, the word “delay” turns up 45 times in the document, according to a Washington Post report — not counting the already announced one-year suspension for the employer mandate — and scales back various policies that are critical to preventing extensive fraud on the taxpayer’s dime.
The big two: HHS will no longer attempt to verify individual income eligibility for health coverage subsidies and will rely on self-reporting with only minimal efforts to verify what people say they earn; and state and federal exchanges will no longer have to verify an applicant’s claim that they do not receive coverage from their employer.
To the Wall Street Journal, these changes equate to “liar subsidies” and are all too reminiscent of “liar loans”, the low- or no-documentation mortgages that didn’t check pay stubs or W-2s before issuing approval. “ObamaCare is now on the same honor system,” writes the WSJ, “with taxpayers in tow.”
Under the original law, people were only supposed to receive a subsidy under two conditions: they met income thresholds and were not offered federally approved employer-sponsored benefits. Now, under Friday’s rule, neither of these conditions must actually be met prior to receiving tax-funded subsidies, because… here is the shocker: verification is “not feasible” as a result of “operational barriers” and “a large amount of systems development” which cannot happen prior to October 1, 2013.
Anyone see that coming?
To the administration, these fundamental changes are nothing more than “slight technical corrections” under the premise that verification on the individual end cannot happen since businesses will not be reporting benefits until 2015. Even if that part were true, which is a stretch at best, the income reporting requirement has nothing to do with the employer mandate.
But to Forbes contributor Avik Roy, it appears the true motivation behind these … delays … is ensuring that enough Americans enroll onto ObamaCare-sponsored platforms to make it politically impossible to repeal the plan in the future. And while it is presumably possible for the IRS to claw back subsidies after learning one’s true income, “deliberately encouraging tens of billions of dollars of waste, fraud, and abuse in order to achieve a political objective is profoundly immoral.”
The administration also postponed until 2015 the requirement that states provide electronic notice of eligibility for people who apply for tax subsidies — but, it seems, that without any real eligibility validations in place, folks should feel fairly confident that they’ll get their desired approval.
Karen Cyphers, PhD, is a public policy consultant, researcher, and mother to three daughters.
