For Immediate Release
May 27, 2014
Contact:

Aaron Fobes/Julia Lawless (202) 224-4515

Hatch, McConnell and Coburn Question Accuracy of Obamacare Subsidies

‘These reports call into serious question the veracity of the Secretary’s certification that Exchanges will accurately verify an applicant’s eligibility for subsidies before they were issued,’ three senior Republican senators wrote in a letter to the Health and Human Services Inspector General citing reports that the government may be paying incorrect Obamacare subsidies.

WASHINGTON Finance Committee Ranking Member Orrin Hatch (R-UT), joined by Sens. Mitch McConnell (R-KY) and Tom Coburn (R-OK), today urged the Department of Health and Human Services (HHS) Inspector General (IG) to carefully examine recent reports that the government may be paying incorrect Obamacare subsidies as the IG prepares to submit a mandated report to Congress by July 1. 

In a letter to HHS IG Daniel R. Levinson, the lawmakers wrote that outgoing HHS Secretary Kathleen Sebelius may have incorrectly certified that the Obamacare exchanges verify that individuals receiving tax credits and cost-sharing assistance are actually eligible to accept those taxpayer-provided subsidies. 

Sebelius certified to Congress in January that the exchanges could confirm that subsidy applicants are eligible to receive the benefits, and she detailed a number of measures that were supposed to be in place to protect the taxpayer. Congress passed a law that requires the HHS IG to issue a report by July 1 of this year evaluating the effectiveness of safeguards to prevent improper payments. 

But a number of reports, including a recent story in The Washington Post and testimony from the Treasury Department’s IG for Tax Administration, indicate that many of the systems needed to ensure verification have yet to be built or used.  The Washington Post reported earlier this month that the government may be paying incorrect Obamacare subsidies to more than 1 million Americans for their health plans because the computer system capability that would match proof with the application hasn’t yet been built. The Treasury IG testified last month that some of the systems needed to prevent improper or fraudulent payments had not been completed, tested or deployed. 

“These reports call into serious question the veracity of the Secretary’s certification that Exchanges will accurately verify an applicant’s eligibility for subsidies before they were issued,” wrote McConnell and Hatch, who is the ranking Republican on the Senate Finance Committee, and Coburn, the ranking member of the Senate Homeland Security & Governmental Affairs Committee. “It seems highly unlikely that the Secretary could accurately certify that systems were in place to verify the accuracy of applicant information, when in fact these systems had not been fully developed, tested, and deployed.”  

The lawmakers said they would “strongly encourage” the IG as he prepares his July 1 report, to carefully examine the media reports and Treasury IG testimony when evaluating the effectiveness of the procedures and safeguards the Secretary certified. 

“Whatever one’s opinion of Obamacare, the American public deserves to know that their tax dollars are allocated appropriately and that public officials take their responsibility to accurately and faithfully apply the laws enacted by Congress seriously,” the lawmakers wrote. 

Read the letter here

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