Ethics and Millennials
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Do we need a new law to prevent fraud in Obamacare?

Proposed No Subsidies without Verification law reflects the decline of Moral Values in Society

I don’t get it. Why would we need a new law to prevent fraud and abuse in the Affordable Health Care Act (Obamacare)? Don’t we have enough laws on the books already? Aren’t fraud and abuse already illegal? Will another law make a difference when we live in a society where all too many scam artists are looking for a quick way to make a bucket-load of money without working? Isn’t it the greed of all too many to the detriment of most of our fair-minded, hard-working, ethical Americans really the problem? If you agree, then another law is useless, wasteful, and probably wouldn’t be monitored and enforced with any regularity. Ethics cannot be regulated.

In last week’s Republican address, Representative Diane Black (R-TN) called on the Democratic-run Senate to pass the No Subsidies without Verification Act, which prevents fraud and abuse in the president’s health care law by stopping the government from issuing health care subsidies until it has a system in place to prevent fraud.

Black said that the bill is necessary, and called for the Democratic-controlled Senate to pass it, because "in an attempt to prop up its struggling health care law, the Obama administration decided they would hand out subsidies without verifying who is "eligible" and relies "on the honor system."

Rather than exercising "common sense and accountability, the Administration is willing to just give away your tax dollars – no questions asked," Black said. "Not only is that unfair to hardworking taxpayers like you, it opens the door a mile wide to fraud and abuse," she noted. And according to independent estimates, up to $250 billion in bad payments could be spent over the next 10 years, she pointed out.

Black's bill is a response to a rule, issued in July by the Department of Health and Human Services (HHS), that gives state-run health insurance exchanges some flexibility week that would prevent the government from issuing insurance subsidies to people under Obamacare until it has ‘a system in place to prevent fraud by verifying consumers' income levels. The Senate Appropriations Committee in July approved a measure urging the government to verify annual household or individual income prior to making available premium tax credits under Obamacare.

I am amazed that a massive bill such as Obamacare that is 1,990 pages long did not adequately address the issue of fraud in all aspects of the program prior to its passage. Talk about acting without clearly seeing the consequences of your acts.

The act was passed in November 2009, and now 13 years later our incredibly inefficient congressmen and congresswoman are realizing that the program opens the door to fraud and abuse. The sad part is that the debates during passage of the program glanced over the fraud and abuse issue.

Fraud is illegal and defined as making false statements or representations of material facts to obtain some benefit or payment for which no entitlement would otherwise exist. These acts may be committed either for the person’s own benefit or for the benefit of some other party. In other words, fraud includes the obtaining of something of value through misrepresentation or concealment of material facts. Doesn’t that mean those who commit fraud in receiving Obamacare subsidies, lying on intake forms, cheating others out of rightly earned payments, and committing other fraudulent acts already can by investigated and prosecuted without another costly law and bureaucratic process?  

Fraud and abuse have run rampant in government programs for years and I have no doubt it will spread like wildfire once Obamacare fully comes on line. All we have to do is look at the record with regard to Medicare. Federal authorities claim to have recovered $4.1 billion in 2011 from fraudulent activity, but had to spend millions of dollars to recover it.

How much Medicare and Medicaid fraud is there?  No one knows for sure.  In 2010 the Government Accountability Office (GAO) released a report claiming to have identified $48 billion in what it termed as “improper payments.”  That’s nearly 10 percent of the $500 billion in outlays for that year.  However, others, including U.S. Attorney General Eric Holder, suggest that there is an estimated $60 to $90 billion in fraud in Medicare and a similar amount for Medicaid.  

Our way of life that dates back to when immigrants built this country on hard work, responsibility, and integrity has been under attack for years. A declining societal ethic fueled by the television and movie industries, tasteless use of social media, parents apathetic to raising their kids in an ethical manner, and looking the other way when someone does something wrong, all have coalesced to attack the American way of life many of us grew up with.

Does this mean American exceptionalism no longer exists? The jury is still out on this question but it seems clear to me we cannot sustain the society so many of us have come to know and love – one built on moral values -- if we continue down the road we are on, and Obamacare is just another vehicle used to push us further down the proverbial ethical slippery slope.

Blog posted by Steven Mintz, aka Ethics Sage, on September 17, 2013