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Obamacare’s “Honor System” is Rife for Abuse

The White House’s website has a special section dedicated to ways in which Obamacare addresses waste, fraud and abuse. However, as the President moves forward with the program’s implementation, the Administration is making it easier for abuse.

The following language is lifted directly from that page:

“The House and Senate health reform bills contained an unprecedented array of aggressive new authorities to fight waste, fraud and abuse. The final health reform legislation built on those provisions by incorporating a number of additional proposals that are either part of the Administration’s FY 2011 Budget Proposal or were included in Republican plans.”

Want to cut waste, fraud and abuse in this bureaucratic monstrosity? You can start by simply not handing out Obamacare subsidies to people without verifying who is eligible for the benefit.

One would think that common-sense steps are being taken to prevent that from happening when Obamacare is launched, but they are not. The Administration is turning a blind eye to the problem.

When the exchanges open on October 1st, Americans are supposed to be able to visit a website (similar to any of the sites used to book travel) and, after entering all the applicable personal information, choose from a list of coverage options for which they qualify. The system is supposed to be able to determine if an individual is qualified for government subsidies or if the person’s income is too high to receive government assistance. However, the Administration is not prepared to make a determination for this requirement. So instead, the President is going to take everyone on his or her word.

The Health and Human Services Department (HHS) will let applicants “self-attest” that they are eligible for a piece of the subsidy pie. We’re not just talking a few dollars here either. The federal government will dole out tens of billions in health insurance subsidies as a result of Obamacare.

Supporters of this approach defend it as acceptable because Americans will not cheat the system in fear of being audited by HHS. However, as the Wall Street Journal pointed out in a recent editorial, this is not an effective deterrent. The editors note that a Department of Treasury Inspectors General report shows “that 21% to 25% of Earned Income Tax Credits go to people who aren’t eligible” and that “an equivalent rate of fraud in Obamacare could mean $250 billion in bad payments in a decade.”

My colleagues and I are truly trying to fight waste, fraud and abuse by eliminating the President’s “honor system.” U.S. Senator Tom Coburn (R-OK) and I have introduced the No Subsidies Without Verification Act which will make income verification compulsory instead what amounts to lip service from the Administration.

We need to repeal and replace this terrible law and I pledge to work toward it. However, until that day comes, we have an obligation to protect taxpayers from the billions of dollars in fraud that the Administration is inviting through its flawed implementation of the law. It can also create a successful path forward toward repealing it entirely.

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