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Audit: O-Care Subsidies Vulnerable To Fraud

From an unfazed Associated Press:

Audit: Health care subsidies vulnerable to fraud

By STEPHEN OHLEMACHER | December 3, 2013

WASHINGTON (AP) — Government subsidies to help Americans buy insurance under the health care overhaul may be vulnerable to fraud, a Treasury Department watchdog warned on Tuesday in the latest indication that troubles are far from over for President Barack Obama’s signature legislation…

The new problems concern subsidies that are available to low- and medium-income people who buy insurance through state-based exchanges that opened in October. Those subsidies are administered by the Internal Revenue Service in the form of tax credits, and that’s where the trouble arises.

"The IRS’ existing fraud detection system may not be capable of identifying (Affordable Care Act) refund fraud or schemes prior to the issuance of tax return refunds," said the report by J. Russell George, the Treasury inspector general for tax administration. "The IRS reported that the long-term limitations of its existing fraud detection system include its inability to keep pace with increasing levels of fraud," the report said…

In other words, the IRS is only checking to see if people have bought insurance. And if not, they deduct the Obama-Care penalty from their refund. But the IRS doesn’t have any way to detect or punish fraud. Such as lying to get a subsidy. And the IRS are the only people administering the Obama-Care subsidies.

So no one is guarding the hen house. And never mind that we are talking about billions of dollars here.

Also Tuesday, the administration released a 50-state report saying that nearly 1.5 million people were found eligible for Medicaid during October. As website problems depressed sign-ups for subsidized private coverage, the safety-net program for low-income people saw a nearly 16 percent increase in states that have agreed to expand it, according to the Department of Health and Human Services…

Yippee! (And some people say Obama-Care isn’t working.)

Any problems with the health care tax credits probably won’t come to light until taxpayers file their 2014 tax returns in the spring of 2015. Most of the credits will be paid directly to health insurance companies, with taxpayers seeing the benefit in reduced premiums. Other taxpayers, however, can claim the credits on their federal tax returns, starting with 2014 returns.

Under the health care law, the IRS is in charge of verifying eligibility for the tax credit and calculating the amount. Taxpayers, however, will have to be careful when they apply for the credits. If taxpayers’ incomes increase while they are receiving the credit, and they get a larger credit than they are entitled to, they may have to repay some or all of the credit when they file their federal tax returns.

If they get a tax refund. If not, there is no way to claw the money back. Not that anyone will even try.

On the other hand, if taxpayers get a smaller credit than they are entitled to, they can get the difference in the form of a tax refund. [T[he report warns that IRS systems may not be capable detecting schemes by people who fraudulently claim refunds.

Notice that we are not told why the IRS cant detect the fraud. That doesn’t seem to be an important detail.

"The Obamacare premium subsidies are a fraudster’s dream come true," said Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee. "The very nature of these credits — pay first, verify a person’s income later — will lead to potentially hundreds of billions of dollars of improper payments."

Of course it will.  But what does Obama care? He wants as many people to get subsidies as possible. Whether they are eligible or not. The more people dependent on the government, the better.

This article was posted by Steve on Thursday, December 5th, 2013. Comments are currently closed.

One Response to “Audit: O-Care Subsidies Vulnerable To Fraud”

  1. GetBackJack says:

    I believe Fraud is the point, Stephen Ohlemacher. Or, are you willfully ignorant of the Communist’s Tick-Techinque?

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