Thursday, July 24, 2014

Ouch! Government Accounting Office (GAO) Sting Reveals Applications for Subsidies Can Be Faked

Nothing stings more sharply than the loss of money.

Livy (58 BC to 17 AD), History XXX

Something is rotten in the state of Denmark.

Shakespeare (1564-1616), Hamlet

Government subsidies are what make ObamaCare work. Subsidies are what make the individual and employer mandates possible. Without subsidies, ObamaCare collapses into an unworkable, unsustainble heap.

Subsidies take the sting out of ObamaCare premiums. Without subsidies, premiums become unaffordable, subsidized people exit from the market, and ObamaCare enters a death spiral.

According to Betsy McCaughey “A Ruling That Could Doom ObamaCare,” New York Post, July 22, 2014), without ObamaCare, subsidized people would have to pay four times the subsidized price. That would be too much financial pain to bear, and they would withdraw from the ObamaCare market.

McCaughey is referring to the possible effect of the Halbig-Burwell ruling on July 22. The ruling barred the federal government from handing out subsidies in 35 states with federal health exchanges.

In those states, five million people enrolled in health exchange plans. Eighty five % qualified for subsidies because of individual incomes below $46, ooo or family incomes of $194,000 or less.

If the Halbig- Burwell ruling were to stick (it probably won’t, and it may be up for the Supreme Court to decide), a mass exodus from ObamaCare plans would occur, an insurer death spiral would ensue, and ObamaCare would die.

This theoretical sequence of events is unlikely but was predictable. The accuracy of the verification system has always been suspect, along with prospects for massive fraud. The “back-end” of, it has been repeatedly pointed out, could not sort out those eligible to qualify for government subsidies. Now we learn you can fake eligibility.

To ObamaCare backers, prospects for compassionate “free” government handouts to help the poor and uninsured was irresistible. Obama’s IRS ruled that intent to subsidize the politically disenfranchised overrode the specific wording of the Accountable Care Act, which plainly said only the states could hand out subsidies. ObamaCare supporters had three years to find textual evidence in the law supporting their theory of congressional intent, but they could not or did not.

On July 22, the D.C. court of appeals stepping in with the Halbig-Burwell ruling. Two hours later, the less prestigious court of appeals in Richmond ruled otherwise, saying subsidies were legal because of congressional intent.

Then, in a bewildering turn of events, to compound the confusion, the GAO (Government Accounting Office) simultaneously announced results of s sting operation. The GAO said it had faked online and telephone applications for 12 people, and 11 of the 12 qualified for subsidies. The GAO did this by creating false identities by inventing Social Security numbers, income, and citizenship information and counterfeiting documents.

And so it went. To critics, the GAO sting confirms their worst suspicions – that there is something rotten about and ObamaCare itself. It opens the government and taxpayers to massive hacker fraud. This may not prove to be the case, the possibility exists.

In the words of Muhammed Ali (aka Cassius Clay), born 1942, ObamaCare and “Float like a butterfly, sting like a bee.”

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