Obamacare: “Eligibility without verification promotes healthcare rationing for all.”

Obamacare: “Eligibility without verification promotes healthcare rationing for all.”

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More than one million Americans who signed up for healthcare on the federal exchange may be receiving an incorrect tax payer subsidy under Obamacare as verification of financial eligibility of applicants is not being performed. It is estimated that not verifying eligibility for such credits and reductions could likely equate to approximately $250 billion in fraudulent payments through payments of such Obamacare premium tax credits and cost-sharing reductions. Verification was initially designed to be part of Obamacare, though the mechanism for verification was not spelled out. The Department of Health and Human Services (HHS) was to perform verification, but not until 2015. In response, HR 2775, the No Subsidies Without Verification Act, was introduced to ensure eligibility verification before subsides were provided to applicants. The President was opposed to the bill, arguing that there were already enough checks and balances for insuring verification so that the bill was unnecessary. Accordingly, HR 2775 was modified by the Senate to require HHS to report on the status of eligibility verification in January of 2014. HHS reported that Insurance Exchanges had indeed developed a verification system to for eligibility. However, in April 2014, it was discovered that the HHS verification system had never been implemented, arguably to encourage more applicants to sign up for Obamacare. In any case, in response to HHS’ failure to implement verification, HR 4805 was introduced on 6/5/14, summarized below.

H.R.4805 - No Subsidies Without Verification Act of 2014

No Subsidies Without Verification Act of 2014 – This bill disallows the health plan premium assistance tax credit or cost-sharing reduction under Obamacare before the first date of the first coverage month beginning on or after the date on which the process to verify an individual's household income and coverage requirements of such individual for purposes of determining eligibility for, and the accurate amount of, the credit or reduction, respectively, has been completed.

It requires for such verification:

(1) completion of a manual or electronic review of the information required of an applicant for enrollment in a plan, and

(2) resolution of any inconsistency of such information with records of the Departments of the Treasury or Homeland Security (DHS) or the Social Security Administration.

The bill exempts individuals from the penalty for not maintaining minimum essential coverage for any month with respect to which a premium tax credit is being claimed and that begins before the date on which the verification process has been completed.

The bill also suspends, until the coverage month beginning after eligibility verification has been completed, the premium tax credit and reduced cost-sharing in the case of individuals for whom the subsidy was allowed before enactment of this Act. Finally, the bill provides a special enrollment period for an individual who terminated enrollment in a qualified plan during the period of suspension.

The cost of extending healthcare coverage under Obamacare even at conservative estimates is enormous, $1.4 Trillion ($1,383,000,000,000) over the next 10 years. By some estimates, the gross cost of coverage provisions, before individuals and employers have paid their penalties, stands at more than $1.8 trillion over the same period. Therefore, cost containment where possible makes sense. Verification of eligibility for benefits and the prevention of fraud is crucial as this healthcare expansion program may well bankrupt the US economy. Furthermore, individuals who have received benefits who should not have, will have to pay back benefits once proper verification is implemented. A prospective system of verification seems more cost efficient and just makes more sense than a retrospective verification system. For one thing, applicants now receiving benefits who should not have, may not be in the position to provide restitution when verification is finally implemented. Implementation without verification is, at the very least, irresponsible, driving up the cost of national healthcare paid by taxpayers.

While the intent of Obamacare is to extend healthcare coverage to the uninsured, not only is the price tag enormous, but rationing as a consequence, means that those who previously had health insurance will see it being watered down. Increasingly, patients are being force to see physician extenders (nurse practitioners and physician assistants) rather than the physician. Clinical skills of physician extenders are just not the same as that of more costly physicians. The more that healthcare costs escalate, the greater will be the pressure to institute stricter rationing. Therefore, it should be in everyone’s interest to minimize unnecessary expenditures. Verification of eligibility for Obamacare not only makes sense, but it will slows the “burn rate” of healthcare rationing which is quickly becoming the new norm.

Leslie Tar, Esq.

*Health Law Attorney, Servicing Port Charotte, Punta Gorda, Ft Myers, Naples, Sarasota, Tampa, Tallahassee, Pensacola, Orlando, Gainesville, Vero Beach, West Palm Beach, Ft Lauderdale, Jupiter, Miami, Jacksonville and throughout Florida and Nationally.