Treasury Inspector Warns Health Care Subsidies Vulnerable To Fraud, Suggesting Future Problems

[Purveyor]

Source: Associated Press

WASHINGTON - More troubles for the health care overhaul. Subsidies to help people buy insurance under the law may be vulnerable to fraud, a Treasury Department watchdog said Tuesday in a report suggesting that concerns about the law are far from over.

The rollout of the law has been hurt by cancelled policies and problems with the federal website used by people to enrol in health plans, causing political headaches for President Barack Obama and for Democrats in Congress. The new problems concern subsidies that are available to low- and medium-income people who buy health 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.


Read more: http://www.globalpost.com/dispatch/news/the-canadian-press/131203/treasury-inspector-warns-health-care-subsidies-vulnerable-fr

[matt819]

1. The fucking sky is falling

Of course it's vulnerable to fraud. Any large government program is vulnerable to fraud. There was a post this morning to the effect that the Pentagon can't account for 8.5 trillion dollars in spending. Fraud much?

If we ceased all government programs because of the threat of fraud, nothing would get done. That's why it's important to actually fund federal programs with personnel whose jobs it is to police the fraud. You can't cut these positions and then express shock that fraud is rampant. It's like cutting funding for education and then expressing dismay that American children are falling behind their cohorts abroad.

[Wait Wut]

2. +1

Excellent 'rant'.

[Gormy Cuss]

5. +1 n/t

[marmar]

3. One of sundry reasons to extract "insurance" from health care altogether.

[karynnj]

4. Read the rest of the article

Sounding more upbeat, Acting IRS Commissioner Danny Werfel said, "The IRS has a strong, effective system in place for administering the Premium Tax Credit. We have a proven track record of safely and securely transmitting federal tax information and we have a robust and secure process in place to deliver this important credit for taxpayers."

Most of the credits will be paid directly to health insurance companies, with taxpayers seeing the benefit in reduced premiums. Other taxpayers can claim the credits on their federal tax returns, starting with 2014 returns, which will be filed in the spring of 2015.
<snip>


The inspector general's report says the IRS did a good job of accurately calculating the amount of tax credits when auditors ran tests on the system before the health exchanges opened. However, the report warns that IRS systems may not be capable detecting schemes by people who fraudulently claim refunds.

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Note that most credits go to the insurance company and are directly applied to the rates. This really makes it less open to fraud than almost anything I can think of - unless the idea is that an insurance company will sign up people who did not sign up and think they have no insurance - which seems unlikely to not get them in trouble immediately.

As to the people getting credits - how is this MORE likely to be fraudulent than anything else put in to get a deduction? The fact is our system depends on some level of honesty - and fear of the random audit.

[MisterP]

6. "such as when they wrote it"

[notadmblnd]

7. That's why it should be based on 2012 tax return.

Surely the IRS is capable of verifying 2012's tax returns?