How to use Obamacare to defraud taxpayers in one easy step

How to use Obamacare to defraud taxpayers in one easy step

Obamacare Fast AffordableAs Congress adjourns for its August recess, Republican members remain as divided as ever on the issue of defunding Obamacare. One faction of the fractured party is working vigorously for to gin up support for a pledge to oppose any budget bill that funds the health care law. Sen. Mike Lee, a member of that group, said on Fox News Sunday, “Businesses don’t like it. Individuals hate it. Union leaders say it will be bad for workers. The law is certainly not ready to implement, and we shouldn’t fund it.”

In the opposite corner are old hands in the legislative body who believe that the strategy is unworkable if not suicidal. The threat to withhold funding for the law could lead to an impasse in Congress and the possibility of missing the Sept. 30 deadline for passing a budget. If history is any teacher, the GOP would take the blame for the shutdown.

But what if the law as written opened the door to massive consumer fraud? Would that not constitute grounds for at least delaying implementation of the law if not defunding it altogether? It turns out that such a fatal flaw exists. It is the lack of preparedness on the part of the Department of Health and Human Services to verify applicants’ incomes come October. As reported at LU on July 8, the administration will be relying on the honesty of new enrollees, which could lead to disastrous consequences.

The Heritage Foundation’s Chris Jacobs gives an idea of just how disastrous those consequences could be:

He took a hypothetical family of four with $90,000 in income who were eligible for coverage through the exchange. If this family were honest, they would receive a subsidy of $2,997 to help cover their insurance premiums.

But if that same family put down $35,000 as their income instead, they would receive $10,175 from taxpayers. Even if they were caught, they would have to pay back only $2,500 of their ill-gotten subsidy, due to a loophole in Obamacare.

Supporters of the law will argue that this scenario is unlikely because of stiff penalties associated with misrepresenting information on stax documents. But with anti-fraud investigations having been scrapped, there will be no one guarding the henhouse.

Then again, since the subsidies are designed to assist “poor” families — those who lack “affordable” employer-sponsored health insurance and have incomes between 138%  and 400% of the federal poverty level (between roughly $31,800 and $94,200) — maybe this was part of Barack Obama’s grand plan all along. It fits in nicely with his call for “income equality.”


LU Staff

LU Staff

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