House Republicans want the Treasury to halt its Obamacare subsidy payments to health insurers until they can prove they are not making erroneous payments, citing concerns that taxpayers will be on the hook to pay back amounts that do not sync up with their incomes.
In a letter to Treasury Secretary Jacob Lew, 13 members of the Ways and Means Committee said the administration dropped the ball by failing to build out the federal health exchange, HealthCare.gov, in a way that could identify mismatches between reported income and subsidy amounts when consumers purchased health plans on the website.
Now, Obamacare customers may be in for a rude awakening when the numbers are compared during tax season next spring.
“In other words, the Administration will pay insurance companies first and fix payment accuracy at a later date,” the lawmakers wrote to Mr. Lew. “As you know, this failure to verify incomes will result in millions of individuals receiving tax subsidies for which they are ineligible. Once these subsidies are reconciled with tax filings, many of these individuals will be surprised to learn they owe the IRS because the Administration will recoup them not from the insurance companies but individual taxpayers.”
The Washington Post reported over the weekend that more than 1 million Americans may have received payments that were too high or too low, buttressing the GOP’s worry last year that the administration had not done enough to verify incomes and eligibility under its health overhaul.
“We now know we were right to be concerned,” they wrote.