H.R. 2775: No Subsidies Without Verification Act

H.R. 2775

No Subsidies Without Verification Act

Date
September 12, 2013 (113th Congress, 1st Session)

Staff Contact
Kimberly Betz

Floor Situation

On Wednesday, September 11, 2013, the House will consider H.R. 2775, the No Subsidies Without Verification Act, under a rule.  H.R. 2775 was introduced by Diane Black on July 22, 2013 and has 103 cosponsors. 

Bill Summary

H.R. 2775 prohibits the distribution of premium tax credits and cost reduction subsidies before the Department of Health and Human Services Inspector General certifies that the Department has program in place to verify household income and other coverage qualifications and that the program is operational.

Background

On October 1, 2013, enrollment for the exchanges, Obamacare’s largest entitlement program, begins, and on January 1, 2014, the premium and cost reduction subsidies will be distributed.  Tens of millions of Americans, who are somewhere between 138 percent and 400 percent of the federal poverty line, are expected to be enrolled in the exchange at some point at a cost of close to $1.1 trillion over ten years.[1]  Yet, on June 19, 2013, GAO released two reports – one on the individual exchange and one on the small business exchange – highlighting the implementation problems that both types of exchanges face.  GAO specifically cited the exchange “implementation delays and missed deadlines” and the “potential for implementation challenges moving forward.” In particular, GAO cited concerns with the implementation of the on line systems and data hub that will compile and verify personal information and that have yet to be completed – let alone tested.[2] 

On July 5, 2013, in a 606-page regulation, the Department of Health and Human Services reported that the on-line systems were not in place to safeguard and verify the information included in exchange applications and therefore would be relying on self attestation and sample audits with respect to the veracity of the information submitted.[3]  HHS officials subsequently announced that its audit sample size would be 100 percent of the population. Yet, no official changes to the regulation have been announced.

On August 2, 2013, the Department of Health and Human Services Deputy Inspector General wrote to the CMS Administrator “several critical tasks remain to be completed in a short period of time, such as the final independent testing of the Hub’s security controls, remediating security vulnerabilities identified during testing, and obtaining the security authorization decision for the Hub before opening the exchanges.”[4]

 

Cost

According to CBO, H.R. 2775 would not affect direct spending or revenues.  Pay-as-you-go procedures do not apply to H.R. 2775 because enacting the bill will not affect direct spending or revenues in [CBO] and JCT’s estimation. Finally, H.R. 2775 contains no intergovernmental or private sector mandates as defined in the Unfunded Mandates Reform Act of 1995 (UMRA).[1]

Additional Information

For questions or further information contact the GOP Conference at 5-5107.