Should the Feds Verify That Only Citizens and Eligible Residents Get Tax Credits for Health Insurance Premiums? (H.R. 2581)

What is H.R. 2581?

(Updated August 26, 2021)

This bill — known as the Verify First Act — would require federal agencies to verify that a recipient of the premium tax credit is a U.S. citizen or lawful permanent resident before advance payments of the tax credit are made. That requirement would also apply to the advance payments of a new tax credit under the American Health Care Act (if it’s enacted) after 2019. Individuals could provide a Social Security number in order to comply with the requirement.

Argument in favor

People who are in the U.S. illegally or are otherwise not entitled to tax credits for health insurance premiums shouldn’t be getting that assistance. This is a commonsense way for federal agencies to prevent tax dollars from being spent fraudulently.

Argument opposed

This bill would make it harder for working families to access to affordable healthcare by requiring more paperwork and administrative barriers. Besides, some eligible people, like newborns, may not have a Social Security number when applying.

Impact

People purchasing health insurance who may be eligible for premium assistance tax credits; and federal agencies.

Cost of H.R. 2581

The CBO estimates that enacting this bill could affect revenues or spending because it’s contingent on the enactment of the American Health Care Act.

Additional Info

In-Depth: Sponsoring Rep. Lou Barletta (R-PA) introduced this bill to stop fraud in the distribution of healthcare tax credits and protect taxpayer dollars:

“Every taxpayer dollar that goes to someone committing fraud is a dollar that is not going to help working families and those who truly need and deserve assistance. My bill would fix this problem by verifying that an individual is legally entitled to taxpayer-funded benefits before sending that money out the door.”

Democrats on the House Ways and Means Committee opposed this legislation because “it imposes additional and unnecessary bureaucratic paperwork on working families that are in need of financial assistance to afford their health insurance premiums.”

This legislation was passed by the Ways and Means Committee on a party-line 22-16 vote, and has the support of 14 Republican cosponsors in the House.

Of Note: A 2016 Senate report found that unauthorized immigrants received up to $750 million in Obamacare premium subsidies. A total of 471,000 people who were covered in 2015 didn’t produce documentation of their citizenship or immigration status in their application, although that doesn’t necessarily mean all were ineligible.

Media:

• Sponsoring Rep. Lou Barletta (R-PA) Press Release
  
• CBO Cost Estimate
  
• Roll Call
  
• NumbersUSA (In Favor)