The small crumb Democrats threw to Republicans on Wednesday to avert a US debt default made an immaterial and unnecessary administrative change to how the Department of Health and Human Services reports to Congress on the Affordable Care Act.
After their suicidal attempt to shutdown the government and overturn a law mandated by two elections and a Supreme Court decision, GOP lawmakers walked away with a trinket that requires the HHS Secretary and Inspector General to report next year on how the agency verifies income eligibility for subsidies and guards against fraud.
These two appearances before Congress will be in addition to the legions of officials who are forever accountable to committees and subcommittees with authority over the ACA.
In walking away with their little consolation, GOP lawmakers should have known that the reporting requirement was unnecessary — because any congressional committee with oversight of a government agency can haul officials before Congress to account for their job performance. How this had to be written into budget deal only shows how desparate Republican lawmakers were to show they got something for driving the US towards economic calamity.
The Republican led House took issue this summer when HHS altered the way income eligibility for subsidies would be verified in the health care exchanges.
Chris Meekins, chief of staff for Congressman Andy Harris, R-MD1, told the Spy Wednesday that the original language in the ACA required HHS to audit every applicant before awarding a subsidy.
“They could do that in any way that the HHS Secretary determined,” Meekins said in a phone interview with the Spy on Wednesday. “In enforcing their initial verification rules, the initial plan was to say anyone who reported 10 percent less than what the IRS data showed in the previous year would be examined.”
Meekins said HHS changed the verification rule in July and opened the door to fraud.
“The new rule says they will only double check if there is a statistically significant number of applications with large income disparities over the previous year,” Meekins lamented. “The general jist is that HHS now says it’s OK to cheat the government a little bit, but if you cheat us a lot we might happen to catch you.”
But Democratic lawmakers and HHS officials said the rule change in July did not change the process where income data from the IRS, Social Security Administration, and employers will be verified against what is reported by every individual applying for a subsidy in the exchanges. Additional documentation from applicants will be required when there is a “significant discrepancy between the income reported on an available tax return and the income provided by the individual.”
“No matter which type of marketplace is operating in a state, the marketplace will always check the income information submitted by individuals against electronic income data sources such as tax filings, Social Security data, and current wage information,” wrote Marilyn Tavenner, Administrator, Centers for Medicare & Medicaid Services for HHS in July. “In most circumstances, we will request additional documentation from all affected individuals, such as when an individual does not have a tax return on file and attests to an income significantly below current wage data.”
Sen. Barbara Mikulski’s office said that current ACA law rigorously verifies what an applicant claims as household income against government records – allowing for the government to levy stiff fines in the event of fraud.
“There is already a system in place to verify the incomes of people applying for help,” said Allana Wellspeak, a staffer in Sen. Barbara Mikulski’s office. “Under ACA law, consumers’ self-stated income, provided under penalty of perjury, is checked against figures from the IRS, the Social Security Administration, and if necessary, employer-based data and other information to determine the amount of premium tax credits and cost-sharing assistance. The IRS also conducts a second verification process that reconciles tax credit payments with income tax filings to ensure that any overpayments are recouped.”
Cardin assures Marylanders that eligibility won’t change under Wednesday’s budget agreement
“Marylanders are just beginning to explore the wide choice of private health insurance options available to them through the Maryland Health Connection,” said Senator Ben Cardin in an email to the Spy on Thursday. “Our rates are among the lowest in the nation and an estimated three out of four Marylanders purchasing coverage through the Maryland Health Connection will be eligible for tax credits to reduce the cost of coverage even further. The income verification provision in the final agreement that reopened the federal government simply ensures that those who are entitled to help in paying their premiums are eligible. It does not change who is eligible for these subsidies nor does it change the amount individuals might receive.”
The price of health care subsidies
The 16-day hostage/budget standoff cost the US economy $24 billion, which is just $2 billion less than what the government will spend on health insurance subsidies in all of 2014. The $26 billion budgeted for subsidies in 2014 is also just $3 billion more than the annual cost of farm subsidies, which the GOP has yet to close the government over.
If the GOP detests subsidies so much they can start chipping away at the $100 billion in annual taxpayer subsidies to prop up US corporations. The conservative Cato Institute says these subsidies do absolutely nothing to spur economic growth.
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