IRS Unable to Reclaim $1B in False Obamacare Subsidy Claims

Some 87 percent of Obamacare participants receive subsidies to offset the premiums for their health insurance, with the total of subsidies claimed — based on applicants’ stated income while applying — running at $27 billion a year. In the latest accounting, $3.7 billion of that outlay was based on false or outdated claims, of which only $2.7 billion has been recovered.

But it’s not all the fault of the Internal Revenue Service (IRS), which is responsible for auditing the tax-based subsidies. The authors of the Affordable Care Act (ACA, or Obamacare) set limits on how much the IRS was allowed to claw back from subsidized policyholders, for fear that too much IRS interference might sink the entire health care program.

In 2017 the government paid $5.8 billion in overages and had to leave $3.5 billion on the table by law. So, the 2018 statistics just released by the inspector general show a bit of an improvement.

The Trump Department of Health and Human Services (HHS) has vowed to come up with a rule to thwart cheating on Obamacare applications but has yet to issue anything concrete.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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