Rep. Tom Reed Thursday voted in the House of Representatives to pass the No Subsidies Without Verification Act, a bill requiring a secure verification system be in place before Obamacare subsidies are handed out. Currently, the Administration does not have a viable system in place to ensure the information individuals enter when applying for Obamacare subsidies is accurate.
"This is a hugely concerning problem because the Administration has no way of knowing if subsidies are going to the right people," Rep. Reed said. "We need accurate verification systems that secure taxpayer information, protect taxpayer dollars, and prevent the Administration from adding to the national debt by issuing unwarranted subsidies. It's common sense to verify information before the Administration hands out subsidy money."
In July 2013, the Department of Health and Human Services (HHS) announced that the Administration would no longer verify that each applicant for exchange subsidies is qualified for assistance as part of a 600-page document announcing new Obamacare regulations. The No Subsidies Without Verification Act requires the Department of Health and Human Services Inspector General to verify subsidies are issued only to qualified, eligible individuals. Similar legislation has been offered in the Senate.
Without a verification system in place, Obamacare subsidies will go to individuals who inadvertently apply for subsidies they do not qualify for, mainly because they do not understand the law's regulations. A lack of verification system also means increased fraud in Obamacare. With no documentation, individuals can freely apply for -- and receive -- taxpayer-funded subsidies. According to a recent article published in the Wall Street Journal, not verifying eligibility could equate to over $250 billion in fraudulent payments through the subsidy program.
"Whether individuals make a mistake in applying for subsidies or fraudulently report their income or work status, the IRS will end up providing subsidies to individuals who are ineligible and the President's health care law will end up costing Americans even more," Reed warned.
"Americans will be faced with the threat of having to pay back thousands of dollars in subsidies as part of their future tax returns. Many, expecting to see a tax refund, will instead be hit with a surprise tax bill. That's just not fair."
The Democrat-led Senate Appropriations Committee already unanimously passed legislation stating the Administration "should verify annual household or individual income prior to making available premium tax credits under" the law.
The Administration continues to struggle with Obamacare implementation. In July, the President announced he would delay employer reporting requirements and the employer mandate for one year. Now more than three years after passage of the President's health care law, the Administration still has not put a verification system in place.