The IRS can’t weed out bogus Obamacare exchange customers and didn’t have critical information on others more than halfway through the tax filing season this year, making it impossible to figure out whether Americans were claiming too much money from the government, the tax agency’s auditor said Tuesday.
The findings were released the same day President Obama insisted his health law has been a resounding success, signaling he will demand that Congress revive it as-is if the Supreme Court kneecaps it in a ruling later this month.
“When you talk to people who actually are enrolled in a new marketplace plan, the vast majority of them like their coverage. The vast majority are satisfied with their choice of doctors and hospitals and satisfied with their monthly premiums. They like their reality,” Mr. Obama told a receptive crowd at the Catholic Health Association’s conference in Washington.
But the Affordable Care Act is suffering behind the scenes as the administration tries to cope with implementing the massive law amid miscommunications, reluctant customers and continued opposition from many Americans and most congressional Republicans.
Some state exchanges struggled to submit data fast enough for the IRS to verify whether customers were getting the right subsidy to buy their plans, the Treasury’s Inspector General for Tax Administration said.
In at least some cases, exchanges didn’t submit data on their customers until late March, leaving the IRS in a jam as it relied on other methods to figure out whether customers who got subsidies were actually eligible for them.
The IRS also is unable to make sure those who bought plans through the exchanges really didn’t have any other options. Obamacare’s exchange plans and subsidies are supposed to be available only to those who don’t have another option, such as a job-based plan or a government-run program like Medicaid.
But the Treasury Department gave companies and insurers until next year to report on who’s on their rolls, meaning the IRS has no way of figuring out if those who claim tax credits are actually eligible.
The IRS hasn’t even decided whether to demand repayment from those who got subsidies during a 90-day grace period when the government is trying to resolve inconsistencies with their applications.
“As a result, these individuals continue to receive [the tax credits] until such time as the exchange finds the individuals to be ineligible,” TIGTA said.
Obamacare’s subsidies are at the heart of a Supreme Court ruling due this month that could make or break the law in more than 30 states that rely on the federal HealthCare.gov website.
The justices are scheduled to say whether subsidies should be restricted to the handful of states that set up their own insurance exchanges.
As it stands, the administration is paying out subsidies to exchange customers no matter where they live. Up to 6.4 million Americans risk losing their health coverage if the justices side with challengers.
Earlier this week, Mr. Obama criticized the justices for even taking up the case. On Tuesday, he turned to the merits of the law itself, casting it as the capstone of a decades-long crusade to insure a voiceless minority of Americans who lacked access to care.
He said his signature domestic achievement will rise above the “partisan attempts” to roll back its progress.
“Despite the constant doom-and-gloom predictions, the unending Chicken Little warnings that somehow making health insurance fairer and easier to buy would lead to the end of freedom, the end of the American way of life — lo and behold, it did not happen,” he said.
Congressional Republicans accused Mr. Obama of living in an alternate reality, citing the law’s unpopular mandates on individuals and employers, and insurers’ requests for double-digit rate hikes for the coming plan year.
“Support of the health care law is right now at an all-time low, and the reason for that is most people feel it is a bad deal for them personally,” Sen. John Barrasso, Wyoming Republican, said.
They said they’ll be ready to move away from Obamacare if the court invalidates its subsidies this month, while proposing a plan to rescue the millions of affected Americans who could lose their plans. GOP leaders, though, have said they won’t settle on a strategy until they see the ruling.
Sen. Bill Cassidy, a freshman Louisiana Republican, formally unveiled his own plan Tuesday. If the subsidies are struck down, it would allow states to respond in one of three ways: set up exchanges under Obamacare, do nothing and lose federal support or opt into his plan, the Patient Freedom Act.
His proposal would scrap Obamacare’s mandates and offer either state block grants or federal tax credits to help people get health care. The money would go directly to the patients — not insurers, as Obamacare tax credits do — through health care savings accounts, a tax-advantaged fund that conservatives support because they feel it forces patients to spend their health care dollars more wisely.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
Please read our comment policy before commenting.