Gov't 'Encouraging People to Sign Up for Insurance and a Subsidy That They May Not Be Eligible For'

October 30, 2013 - 7:09 AM

paul ryan

Rep. Paul Ryan (R-Wis.) (AP File Photo)

(CNSNews.com) - People who depend on tax refunds may be in for "rude awakenings" under Obamacare, Rep. Paul Ryan (R-Wis.) told the head of the Center for Medicare and Medicaid Services on Tuesday.

He said the problem is subsidies and whether people who get them should be getting them.

"The law is, if you are under the age of 26, and you are eligible to stay on your parents' plans, you cannot receive subsidies," Ryan told Marilyn Tavenner, who was called before the House Ways and Means Committee to discuss the Affordable Care Act.

"And there is nothing -- nothing -- on your website that tells an under-26-year-old those facts," Ryan said. "So you're encouraging people to sign up for insurance and a subsidy that they may not be eligible for, and they don't even know this."

Under the law, people who get subsidies they should not have received will have their tax refunds docked.

Earlier, Tavenner told Ryan that the healthcare.gov website includes "clear instructions" that you are completing the application under penalty of perjury. "It's very clear, there's also help instructions on each site to explain each process -- what is credible employer coverage, what happens if you're under 26, it is all available on the website," Tavenner said.

Tavenner also told Ryan that "we have ways of verifying whether or not employer-sponsored coverage was offered. So it's not just as simple as yes or no. If they (people under 26) don't have it, it's a no, so we accept that. If it's yes, then we try to work with them to see if they're eligible for anything or not."

Ryan specifically asked Tavenner if the government is verifying whether individuals under the age of 26, who are eligible to stay on their parents' approved plans, are doing that or not:

Here's the question," Ryan said. "Are we really verifying at the front-end whether a person's actually eligible for these subsidies or not? And here's why this matters: If they're not eligible for the subsidy -- and then once we reconcile these records -- they get taxed the money back, off of their refund. And so this is what I mean when I say rude awakenings. If people are signing up for insurance, they're getting tax credit subsidies, funded by taxpayers... you're not telling us whether or not you're proactively determining whether, say, an under-26-year-old is actually eligible for the subsidies you're trying to sell them."

The application asks young people if they are dependent on their parents, Tavenner said, "so that is part of the questioning that goes on."

"I'm asking about, if a person signs up, were they offered credible employer insurance. Because the employer mandate's been delayed, you don't have that verification tool, so you had to come up with a new verification tool to determine their eligibility for subsidies.

"Because if a person is offered insurance at their job that meets your definition of credible insurance, then they can't get Obamacare subsidies. If a person's 25 years old and they go on the website and they say their income is 'X,' and that is eligible for subsidy, they can get that subsidy. But if they were eligible to be on their parents' plan, they're not allowed to get that subsidy.

"That's right," Tavenner said.

"The question is, are you filtering that?" Ryan asked.

"Because here's the problem. If you get this wrong, the way the law works is, you have to take that money back from their tax refund. Tax refunds matter. People plan their lives around their tax refunds. They plan their spring breaks for kids, they plan their car payments, their bills -- and what people in this country don't yet know is that if you get this wrong ...which you've already acknowledged you're not doing it right -- they're going to get their refund taken away from them because they will have signed up for a subsidy that they weren't eligible for, which they didn't even know."