Pitts: Still Broken


The Energy and Commerce Subcommittee on Health, chaired by Joe Pitts (R-PA), last week held a hearing with witnesses from the Department of Health and Human Services Office of the Inspector General to discuss the independent watchdog’s recent reports highlighting inconsistencies in Obamacare applications and eligibility verification. Among the concerns raised, the hearing revealed is still incomplete, just four months from the start of the second open enrollment period. In a column for the committee’s Idea Lab, Pitts reviews the many flaws of not only the exchange, but the health care law itself. “Health reform should have been about making insurance more affordable for everyone,” Pitts said. “Instead, we have a law that simply moves money around to benefit a few. Certainly, we can do better.”

THE IDEA LAB: Still Broken

By Congressman Joe Pitts was a flop when it launched in October 2013. We all remember how impossible it was for Americans to buy health insurance through the website in the months following the launch. It was a national joke and the subject of late night comedy for months.

After throwing enough money and computer experts at the problem, the Obama administration has the front end of running. But the reality is that the mess has merely been swept under the rug, out of public sight. is supposed to do two things: first, allow individuals to browse for health care coverage options; second, verify whether individuals are eligible for subsidies and determine the proper level of subsidy.

Consumers select a plan and then provide information about their income, their immigration status and whether or not their employer already offers them a subsidized insurance plan. Subsidies are provided on a sliding scale, they are only available to legal residents of the U.S. and are not provided if an employee declines to participate in their employer-subsidized plan.

Over the course of the coming decade, the government may pay out over a trillion dollars in subsidies. With our annual deficits topping out at hundreds of billions of dollars a year in the foreseeable future, you would think that the administration would want to stop people from getting subsidies they don’t deserve. You would be wrong though.

The first shock came last summer when the administration announced that they would simply use the “honor system” to determine whether applicants are correctly stating their income. People only have to sign an attestation that they are telling the truth.

The second shock came more recently when the Health and Human Service Inspector General reported that there were 2.9 million inconsistencies in applications. More than 2.6 million of these could not be resolved by HHS because the eligibility verification system is not fully operational.

Right now, there is only a cumbersome manual process for resolving these problems. It could be later this summer before there is an automated process, but there are no assurances that the administration will be ready before the next Obamacare open season this fall.

Unbelievably, former HHS Secretary Sebelius certified that such a system did exist when she signed documents at the beginning of this year. We can’t forget that she was the same person who assured the American people and the President that the website would be running smoothly on October 1.

Since the time that the Inspector General released their report, the problem has gotten worse, not better. Energy and Commerce Committee staff estimate that there are now more than 4 million inconsistencies.

It’s pretty clear now that the administration’s approach to subsidies is “pay first, ask questions later.” That might make the program popular with individuals who are getting money, but it’s a raw deal for taxpayers who might be getting fleeced.

It is simply unacceptable that CMS does not yet have the internal controls necessary to validate Social Security numbers, citizenship, national status, income, and employer-sponsored coverage. Americans sending taxes to Washington don’t deserve to have their money so blatantly disregarded by a federal government that is supposed to serve them.

Fraud is bad, but what might be even worse is if innocent middle class Americans get hurt by the administration’s recklessness. Subsidies are paid directly to insurers, consumers only see the savings in lowered monthly premiums. However, the law requires that individuals pay back any improper subsidies out of their own pocket. Families who made an honest mistake in their application may find themselves with a big bill from the federal government.

Obamacare clearly wasn’t ready for primetime in October, and it’s still a mess. This all comes from the notion that government can make health insurance more affordable through a complex system of regulations, taxes and subsidies.

In a recent phone call with constituents, I asked people whether they were paying more or less for insurance now that Obamacare has gone into effect. The results certainly weren’t scientific, but only 13 percent of people said they were paying less. Nearly 50 percent said they were paying more. Health reform should have been about making insurance more affordable for everyone. Instead, we have a law that simply moves money around to benefit a few. Certainly, we can do better.