Debt Limit Deal Strengthens Income Verification for Exchange Subsidies
The debt limit deal passed by the House and Senate yesterday included a small concession to Republicans under Health Care Reform. Subsidies available to purchase insurance on an exchange are available to individuals with household income between 100% and 400% of the Federal Poverty Level. As originally envisioned, the exchanges would coordinate with the IRS and the Social Security Administration in order to verify that an individual earned the requisite income to qualify for the subsidies. Earlier this year HHS relaxed the income verification procedures for 2014 when it became apparent that the systems required would not be in place before the opening of the exchanges on October 1. Many have raised concerns that the relaxed standards would result in significant fraud and abuse.
The debt limit deal requires that before any subsidies are made available, HHS must make sure that the exchanges adopt procedures to ensure that only individuals eligible for the subsidies will receive them, and must report those procedures to Congress by January 1, 2014. Also, no later than July 1, 2014, the Inspector General of HHS must report to Congress on whether the procedures that have been adopted have been effective in preventing the submission of inaccurate or fraudulent income information.