Trying to give the new public health insurance exchange system complete, accurate information about household income is difficult and potentially dangerous, witnesses told lawmakers today. Douglas Holtz-Eakin, president of the American Action Forum, presented a colorful, full-page income verification flowchart with seven major sections and three paths that lead to a step labeled "honor system."
Holtz-Eakin, also a former director of the Congressional Budget Office, said the closer consumers get to going through the exchange system income verification process, the more complicated it looks. If consumers give the wrong information, "the penalty for unintentional negligence could as much as $25,000," Holtz-Eakin said. "Intentional misrepresentation could result in a fine of $250,000 or incarceration."
Ron Pollock, executive director of Families USA — a group that supports the Patient Protection and Affordable Care Act (PPACA) and the exchange system — argued that reports of income reporting inconsistencies are less of a problem than they seem. Regulators have developed and will continue to develop workarounds for the problems that have cropped up, he said.
But Pollock said Congress needs to give exchange managers and other program managers flexibility to help consumers who did their best to provide accurate information. Congress should provide caps on how much money consumers who make mistakes will owe, and provide flexibility that program managers can use to disregard problems that were fixed quickly, the executive added.
Holtz-Eakin, Pollock and others were testifying at a House Ways and Means hearing on PPACA income and insurance information verification.
