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In Debt Limit Talks, Senate Republicans Push Measure to Enforce Obamacare's Anti-Fraud Regulations

2:28 PM, Oct 11, 2013 • By JOHN MCCORMACK
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After Senate Democrats blocked GOP efforts to defund Obamacare, House Republicans voted for a number of modest compromises: delaying the individual mandate as long as the business mandate is delayed, repealing the medical device tax, and the Vitter amendment ending Congress's special treatment under Obamacare. Nearly two weeks into the government shutdown, Senate Democrats and President Obama have been unwilling to compromise on anything.

Obama doctors

Now, Senate Republicans are putting another Obamacare measure on the table as part of negotiations to fund the government and raise the debt ceiling: Requiring the government to verify the eligibility of Obamacare applicants before they receive subsidies.

As The Hill's Alexander Bolton reports, Senate Republicans unhappy with a proposal in the House to pass a clean debt limit bill without funding the government are "coalescing around their own proposal to pair a short-term debt-ceiling increase with a year-long stopgap to fund the government."

The Senate GOP plan would fund the government for a year at a level agreed upon during the 2011 debt limit talks, repeal the medical device tax, and require that the eligibility of Obamacare applicants be verified before they receive subsidies. 

The No Subsidies Without Verification Act was passed by the House in September, but it has not been part of the shutdown showdown until now. 

"Medicare and Medicaid are already fraught with fraud. I don't think we want to start Obamacare even worse by not even attempting to verify incomes," Senator Ron Johnson of Wisconsin tells THE WEEKLY STANDARD. Johnson says he would like to see an end to Congress's special treatment or the anti-fraud measure "attached to any increase to the debt ceiling or any continuing resolution agreement."

Politicians are notorious for pointing to "waste, fraud, and abuse" when they want to pretend to cut spending without actually cutting anything. But the No Subsidies Without Verification Act addresses a real issue, as the Washington Examiner's Philip Klein explained in an article calling for such an anti-fraud bill.

In July, the Obama administration announced that enforcing the law's regulations to prevent fraud "would involve a large amount of systems development on both the state and federal side, which cannot occur in time for October 1, 2013." According to the Wall Street Journal, the bill could save taxpayers as much as $250 billion over a decade.

There's a case to be made that passing the bill would be a more substantive policy victory than repealing the medical device tax and more realistic than delaying the individual mandate. 

Some conservative activists have argued that while repealing the medical device tax would be good for medical innovation, it's also another break for big business and lobbyists. Repealing the tax would also increase the deficit, which would be an odd result of a deal to raise the debt ceiling. 

A delay of the individual mandate may be reasonable and popular, but it could make Obamacare even more dysfunctional, which is why Obama and the Democrats have so strongly resisted the delay. The anti-fraud bill, on the other hand, isn't designed to directly harm Obamacare. It's a non-ideological measure requiring the administration to fix the dysfunctional website healthcare.gov before the government starts doling out taxpayer money. 

"It's entirely reasonable," says Senator Johnson. "HHS has written the regulations on income verification but those regulations were waived." 

"The Democrats have put a stake in the ground saying they will accept no change to Obamacare," Johnson says. "Okay, we're not asking for a change: Just enforce the law."

Democrats say that audits will prevent fraud, but Republican senator Tom Coburn of Oklahoma strongly disagrees.

“Pay and chase doesn't work. We know that from Medicare and Medicaid," Coburn tells THE WEEKLY STANDARD. "The law limits how much we can collect from them even if they did steal it. So that’s B.S.”

Of course, there are also clear benefits to requiring verification of eligibility for Obamacare's ideological foes. “What they're wanting to get is as many people signing up that are young and healthy,” says Coburn. “It spreads the risk away from the expensive patients.” One of Senator Ted Cruz's top concerns is that too many people will become "addicted" to Obamacare’s subsidies after January 1. Ensuring the subsides aren’t going to people who aren’t eligible is in the interest of those who hope to repeal Obamacare.

Coburn thinks a deal repealing the medical device tax and requiring verification for Obamacare eligibility would probably be enough to strike a deal in the Senate. “I can’t speak for the House," Coburn adds, "and they’re working on a whole different track.”

This story was updated at 3:22 p.m.

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