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Honor System? HHS Temporarily Suspends Anti-Fraud Measures in Obamacare

"A man who earns $50,000 per year and gets insurance through his employer could log on to the new government website and say he earns $20,000 and gets no insurance through his employer..."

You're on the honor code now.

A provision in the Affordable Care Act meant to protect against fraud has been suspended temporarily by the Department of Health and Human Services, according to Reuters.

“Days after delaying health insurance requirements for employers, the Obama administration has decided to roll back requirements for new state online insurance marketplaces to verify the income and health coverage status of people who apply for subsidized coverage,” the report reads.

President Barack Obama's health care requires that applicants applying for tax subsidies for health insurance prove that their income was somewhere between 100 percent to 400 percent of the federal poverty line. The bill also requires that applicants prove that they weren't receiving employer-provided insurance.

But HHS decided last week to suspend these anti-fraud measures.

The agency has given "16 states and the District of Columbia, which are setting up their own exchanges, until 2015 to begin random sampling of enrollees' employer-insurance status," Reuters notes.

"The rules also allow only random -- rather than comprehensive -- checks on income eligibility in 2014," the report adds.

What could possibly go wrong?

The administration will now “rely on self-reported data,” the Washington Examiner’s Philip Klein writes.

“You read that correctly. A man who earns $50,000 per year and gets insurance through his employer could log on to the new government website and say he earns $20,000 and gets no insurance through his employer, and the government would not even attempt to confirm that the information is accurate before forking over generous taxpayer subsidies,” Klein adds.

If you thought Medicare and Medicaid fraud was bad, wait until Obamacare goes into full effect sans its anti-fraud provisions.

The a 606-page HHS rule reads: "For income verification, for the first year of operations, we are providing (state and federal) exchanges with temporarily expanded discretion to accept an attestation of projected annual household income without further verification.”

True, as the Washington Post’s Sarah Kliff and Sandhya Somashekharand explain, anyone caught defrauding Obamacare could be fined up to $25,000 and be forced to “repay any excess subsidies they received.”

But how are you going to catch them?

“With this news coming after the employer mandate delay announcement, the Obama administration has now openly conceded that it is in way over its head when it comes to implementing this unworkable law,” Klein notes.

“Republicans should seize on this immediately, and force the administration to defend a policy that would open the floodgates to fraud,” he adds.


Follow Becket Adams (@BecketAdams) on Twitter

Featured image AP photo.

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