Rep. Diane Black (R., Tenn.) sent a letter to Health and Human Services (HHS) Wednesday warning that fraudulent Obamacare subsidies could cost taxpayers billions if the administration fails to remedy over 300,000 inconsistencies relating to applicants’ immigration status.
Black, who sits on the House Ways and Means and Budget Committees, introduced legislation that would prohibit the payment of subsidies unless an applicant’s information is fully verified. The income verification system within Healthcare.gov, which is used to determine subsidies, has still not been completed.
"The numerous delays by HHS and the inability to resolve inconsistencies within the 90-day window required in statute has created doubt on the Administration’s commitment to ensure proper protections are in place to ensure tax payer funded credits are not vulnerable to fraud, waste, or abuse," wrote Black, in a letter to HHS secretary Sylvia Burwell.
"These credits represent the largest area of new entitlement spending in the federal budget and are estimated by the Congressional Budget Office to cost tax payers over $1 trillion over the next ten years, including an estimated $17 billion in 2014," she said.
Black’s legislation warns that the back end of Healthcare.gov is not yet complete, leaving HHS unable to verify if individuals qualify for a subsidy.
HHS warned 310,000 enrollees on Tuesday that their coverage would be dropped unless they prove they have legal status in the country by early September.
The department has closed roughly 450,000 immigration cases out of nearly 1 million applicants whose citizenship or immigration status did not match.
"Notices are being sent in English and Spanish and provide straightforward instructions on how to submit the necessary information and keep their coverage," HHS said in a press release.
Black questioned how the department would verify the remaining 310,000 applicants in her letter on Wednesday. She asked if HHS would review applicants with past coverage, what security mechanisms are in place for storing citizenship documents, and what internal verification process will be used.
The Tennessee Congresswoman also inquired how many of the 1.2 million applicants who also have "inconsistencies" related to their income have been resolved.
Black’s bill, the "No Subsidies Without Verification Act of 2014," would require manual or electronic verification of an applicant’s information before they could receive a subsidy. The bill notes that failure to verify subsidies for Obamacare plans could amount to an estimated $250 billion in fraudulent payments.
"The Obama administration is operating a new federal entitlement program that fails to prevent fraudulent subsidy claims before administered," the legislation states. "In doing so, the Department of Health and Human Services has created a new ‘pay and chase’ program that places taxpayers at financial risk of fraudulent claims."