Obamacare’s foes and supporters offered competing views Wednesday of how the law is affecting the average American’s pocketbook, with Republicans saying the program plays fast and loose with taxpayer dollars while the Obama administration boasted the law has saved consumers billions.
Conservatives cried foul as government investigators told the House’s tax committee they could access Obamacare subsidies with invalid Social Security numbers or other fake information, raising early doubts about the administration’s ability to safeguard tax dollars one day after a federal appeals court decision that threatens to cut off the subsidies to two-thirds of the country.
“It’s another federal program that is going to be easily scammed and easily accessed by someone willing to commit fraud,” Rep. Kenny Marchant, Texas Republican, said at a hearing before an oversight panel of the Ways and Means Committee.
Later Wednesday, Health and Human Services Secretary Sylvia Mathews Burwell announced that a relatively obscure facet of Obamacare has returned $9 billion to consumers since 2011.
The provision known as the “80-20 rule” requires insurers to spend at least 80 percent of premiums on patient care or quality improvements or else cough up a refund. The agency’s report said the recouped dollars from all insurance markets resulted in an average refund of $80 per American family.
“We are pleased that the Affordable Care Act continues to provide Americans better value for their premium dollars,” Mrs. Burwell said.
The competing narratives and resurgent legal battles demonstrate that four years after its passage, the Affordable Care Act is as divisive as ever in the courts and halls of Congress.
Wednesday’s salvos on the overhaul’s fiscal impact were issued one day after federal appellate courts offered conflicting opinions on where the law’s subsidies may flow.
The U.S. Court of Appeals for the D.C. Circuit invalidated an Internal Revenue Service rule that extended the subsidies to every state. In a 2-to-1 decision, the majority sided with plaintiffs who argued the actual law reserved subsidies for exchanges set up and run by states, meaning residents of 36 states that relied on the federal government’s exchange system would be ineligible for the premium tax credits.
But the 4th Circuit unanimously upheld the Obama administration’s view that subsidies may flow to all states, a split that may eventually send the issue to the Supreme Court.
The subsidies are a key selling point of the law. Without them, private coverage would be out of reach for low- and middle-income Americans who enter the exchanges.
But the taxpayer dollars that pay for those subsidies are not being protected, Republican lawmakers argued Wednesday.
Seto J. Bagdoyan, an acting director for forensic audits at the Government Accountability Office, told the House Ways and Means Committee that 11 out of 12 government investigators were able to get subsidized Obamacare coverage by applying online or, when rejected in some instance, by completing the process over the phone. The false applicants cost the government $2,500 a month, or $30,000 per year, he testified.
“These findings, although preliminary, are quite troubling,” said Rep. Charles Boustany, Louisiana Republican who chairs the committee’s oversight panel.
For its part, the administration noted that investigators relied heavily on call centers after online systems turned them down, that false attestations to the government violate federal law and that the administration is constantly cross-checking applicant data.