The Little Bomb The Shutdown Deal Just Inserted Into Obamacare

You just knew it wouldn't be easy.

Remember, kids, self-reporting is a trustworthy thing when it comes to the pharmaceutical, food processing, and fertilizer industries -- but not for your Obamacare application! David Dayen on what a time bomb the concession on Obamacare income verification really is:

And you have to question whether income verification would ever be operational, and if that’s contributing to the major delays on the exchange website. Accurate, real-time income verification has been a cherished goal for members of the financial services industry for many years; they use this data to determine eligibility for loans of all types. Needless to say, big banks and financial services firms have massive resources relative to the federal government. And they haven’t been able to nail electronic income verification yet; they mostly ask people to mail or fax in forms proving income, rather than submit them through the Web (which leads to losing forms and multiple queries for data and all the rest).

Most of the information you can scrape from payroll or Social Security data would be 6-18 months out of date, especially for the types of part-time workers, freelancers, “unbanked” individuals and self-employed persons who comprise the primary group signing up for Obamacare. Demanding real-time income verification would require technology that doesn’t even exist for the financial sector, and to get it right would add significantly to the already burdensome delays in acquiring insurance coverage on the exchanges. It would also expand costs for IT development exponentially, achieving the neat trick of making Obamacare more costly and more ineffective at the same time.

As noted before, there’s an already existing method of income verification, through the IRS, that stands ready to handle any potential misreporting through clawbacks. In fact, the IRS will have to verify income anyway; people simply don’t have perfect information about their future income, especially part-timers and freelancers and the self-employed. This is how many means-tested programs like Medicare and Medicaid work, and despite the cries of conservatives, fraud in those programs mostly come from health care providers bilking the government rather than individual subscribers.

Instead of using a time-tested process that works (and would work better if Republicans weren’t so dedicated to defunding the IRS), the GOP wants to add this kludgey extra step to an already strained online exchange. The clear goal here is to make it harder to enroll or collapse the insurance exchanges entirely, along with creating the impression that Obamacare customers are automatically freeloaders and cheats, which aligns with conservative demonization of other government programs.

David Waldman on the with the short version:

Income verification for people getting subsidies on the health-care exchanges will be strengthened.

Details on exactly how this will work have yet to be released, but it looks like you'd have to have your income verified by the IRS before you can actually sign up. This is already a complex and potentially troublesome part of the signup process, particularly for people like freelancers and the self-employed whose incomes can vary from month to month. There is no reason Republicans demanded this other than to make getting insurance more difficult for as many people as they could and thereby throw sand in the gears of Obamacare. It's really disappointing that Reid agreed to it.

In other words, many of us are screwed.

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