I don't think many of us will be surprised to find out the drafters of PPACA either didn't see this coming or weren't smart enough to do something about it.
Start with the fraud we know is happening;
"Using stolen names and Social Security
numbers, criminals are filing phony electronic tax forms to claim
refunds, exploiting a slow-moving federal bureaucracy to collect the
money before victims, or the Internal Revenue Service, discover the
Parton was a victim of what officials say has ballooned into a massive, and dangerous, illegal industry that could cost the nation $21 billion over the next five years, according to the U.S. Treasury Department."
I have seen higher estimates from CNN
"Last year, the IRS reported 938,664 fraudulent returns related to
identity theft, totaling $6.5 billion, Treasury Inspector General for
Tax Administration J. Russell George told a House subcommittee this
This fraud is so easy and so rampant because it is done online with no face to face contact or verification.
Now lets look forward to PPACA subsidy and verification. 474 pages of rules can be found here.
The exchanges are suppose to mainly be websites where someone can go online and purchase insurance. Again no face to face contact or method to verify identity.
Employers will be notified if one of their employees received a subsidy after the fact. They can appeal, which would mean hours dealing with the IRS or some similar agency trying to convince them you don't owe a penalty. Anyone that has had tax issues can attest as to how efficient and cost effective this is. In most cases it would probably be cheaper to just pay the $2,000 penalty.
Individual applicants will certify what they are eligible for, with minor verification. Read any of the annual Medicaid reports to see how rampant with fraud and errors that already is. It is key to remember that no one has a vested interest in keeping people off Medicaid, it is never their money. They get paid to process paper. not protect the financial interest of the plan. The same problems exist here, it is much easier to just approve a subsidy and let someone else appeal than to question it. I deal with this all the time with unemployment; every employee I fire was let go - according to them - for lack of hours. I spend a few hours dealing with paperwork showing it was for cause, and the majority of the time they don't collect. The rest of the time Ohio Jobs and Family tells me I didn't properly fire someone and awards them unemployment anyway. Never for lack of hours but no one is EVER held accountable for lying on their unemployment insurance claim form.
Illegals, on a daily basis and with ease, already steal SSNs to work, how much harder is it going to be to apply for insurance with a Subsidy?
How do you recover stolen HealthCare?
It is problem enough when the government, through lax enforcement, watches $6 billion a year in refunds walk out the door. As an employer, I will someday pay a share off that. Of immediate concern is a system that allows systemic fraud for which I am immediately liable; $2,000 to $3,000 a year for a couple employees plus hours and hours of my time trying to fix it is something I can't afford.
All of this raises one final question: is this a bug in the system or intended?