Additional Obamacare Delays Could Be Expensive

July 8, 2013

While everyone was on vacation last Friday, the HHS snuck out additional changes to the implementation of Obamacare. The moves, announced a few days after the delay of the employer mandate provision, could lead to a greater incidence of fraud as the government plans to scale back oversight of the subsidy provisions of the health care law.

The first new change announced by the HHS will delay the need for state-run markets to verify consumers’ claims about the whether or not they receive employer provided insurance until 2015. The current law states that anyone who receives insurance from their employer that costs more than 9.5 percent of their income receives a subsidy. This delay could result in people who otherwise would not qualify for the subsidy receiving the subsidy.

The second change announced will severely limit the government’s oversight of income reporting in correspondence with the Obamacare subsidies paid. According to the Federal Register released on Friday, states will be able to “accept the applicant’s attestation [regarding eligibility] without further verification.”

These new income oversight rules could have costly implications. One of the most expensive components of the health care law, the income of the applicant determines the amount of the subsidy they receive. According the Wall Street Journal, if the programs suffers from a similar fraud rate as the Earned Income Tax Credit, the change by HHS could cost taxpayers an addition $250 billion annually.

Nancy Pelosi famously said in March of 2010: “But we have to pass the bill so that you can find out what’s in it.”

Well, the taxpayers are beginning to find out, and I don’t think there is much to like.

For an excellent overview of the entire mess, Avik Roy has been following all the last minute Obamacare changes closely.

You can find more from the Tax Foundation here and here.

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