Federal health officials vowed this week to crack down on illegal immigrants who get Medicare — signaling that one part of the Obama administration believes it has authority to deny taxpayer-funded benefits going to those in the country without authorization.
The Centers for Medicare and Medicaid Services said it could save nearly $70 million from 2015 to 2019 by preventing illegal immigrants from taking advantage of Medicare’s prescription drug program or enrolling in Medicare Advantage plans.
“We are proposing to establish U.S. citizenship and lawful presence as an eligibility requirement for enrollment in [Medicare Advantage] and Part D plans,” said a proposed rule posted late Monday.
Sen. Tom Coburn, Congress’ top waste-watcher, said the agency is making the right move.
“From here, CMS must show they can implement their plans with successful results,” the Oklahoma Republican said. “They also should take the necessary steps to prevent paying taxpayer dollars to dead doctors, doctors with felonies, or dead patients.”
The move raises new questions about the federal government’s eagerness to withhold benefits from illegal immigrants.
President Obama and congressional Democrats agreed not to extend Obamacare benefits to illegal immigrants, but the Internal Revenue Service has repeatedly resisted calls to stop paying a refundable child tax credit to parents who are in the country illegally.
CMS tucked its proposal into Medicare regulations that will be formally published Friday. The proposal also cracks down on doctors and providers who prescribe unnecessary medications or issue fraudulent prescriptions to bilk Medicare.
Illegal immigrants generally are prohibited from receiving federal benefits under the 1996 welfare reform law.
But an internal Health and Human Services audit last year found that while CMS has policies to prevent illegal immigrants from getting most Medicare benefits, it didn’t prevent them from taking part in the prescription drug benefit, or Medicare Part D, which was added under President George W. Bush and expanded by Mr. Obama’s health care law.
The Medicare agency from 2009 to 2011 paid out nearly $30 million in drug benefits to illegal immigrants, the HHS inspector general said in October. In one of its reports, the inspector general said 4,139 illegal immigrants were able to make 279,056 drug benefit claims.
CMS officials acknowledged the problem at the time and said they would take steps to fix it, although some question whether the agency has the tools to find people who are benefiting unlawfully, given that thousands were able to get through the system in prior years.
“They’ve got a long way to go to do what they plan to do,” said David North, a fellow at the Center for Immigration Studies.
Whether or not illegal immigrants should reap taxpayer-funded benefits is an issue that resonates across the federal government. In 2011, the internal auditor at the IRS found that the agency paid $4.2 billion in tax credits the previous year to people who were not authorized to work in the United States.
“The payment of federal funds through this tax benefit appears to provide an additional incentive for aliens to enter, reside, and work in the United States without authorization, which contradicts federal law and policy to remove such incentives,” said the report from the Treasury inspector general for tax administration.
The IRS in the past has said repeatedly that it doesn’t believe the law allows it to deny illegal immigrants the tax credit, and it disputes that it has the legal authority to deny claims even when they aren’t backed up by documents showing that the children live in the U.S.
“The IRS does not have the legal authority to deny credits during processing when documentation is not provided,” the agency said in its response to the inspector general.
Mr. North said the Treasury has made progress by stemming the issuance of individual taxpayer identification numbers that make it possible for illegal immigrants to apply for the credit, but he said existing numbers are still being used.
The IRS, in a recent agency statement, said it “upgraded tools to determine valid identification submitted with ITIN applications” and that it “continues to look for ways to prevent fraudulent refund claims, and has procedures in place to evaluate questionable tax credit claims prior to issuance of a refund.”
Republicans on Capitol Hill repeatedly have proposed changing the law to force the IRS to stop paying the additional child tax credit to illegal immigrants.
Last month, the Senate defeated an amendment from Sen. Jeff Sessions, Alabama Republican, that would have restored a cut to military pensioners’ cost-of-living increases in Congress’ landmark budget deal by closing the loophole that lets illegal immigrants claim the tax credit.
Marshall Fitz, director of immigration policy at the Center for American Progress, said the Medicare Part D and tax credit issues are not the same. He said the tax credit could be paid to parents on behalf of children who may be U.S. citizens.
The Medicare proposal, he said, seems to be a cleanup effort to make sure regulations are consistent with the 1996 welfare law.
“That doesn’t mean that it’s sound policy,” he added, arguing the federal government should solve the problem by legalizing most illegal immigrants, which would remove questions of legality altogether.
The Senate immigration bill that passed last year would put millions of undocumented workers on the path to legal status. In turn, he said, these people could pay taxes into the Medicare trust fund and place it on a better fiscal path.