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Floor Speech
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Mr. GRASSLEY. Only in Washington--only in Washington--can you let people take more than what is legally allowed under a government program and, at the same time, let them keep it. Last year, I shined a light with the Treasury inspector general that over 40 percent of excess marketplace subsidy payments totaling $10 and two-tenths billion, dating back to 2016, were not being recouped.
So why not recouped? Because of the current so-called safe harbor recapture rules. When ObamaCare was passed, it established so-called safe harbor recapture rules for the advanced premium tax credit, also known as a subsidy.
When an individual buys a health plan off of the Federal marketplace, the government subsidizes much of the cost through an advanced premium tax credit. The subsidy is based on a consumer's estimated income. At the end of the year, the consumer reconciles any differences in their subsidy amount based on their actual income compared to their previously projected income.
If a consumer gets more than what is permitted based on their income, they must return the excess amount unless they fall within the so- called safe harbor, which is based on income and excess amount, as a consumer could misestimate their annual income and not be required to pay back any excess subsidy or maybe just a small portion.
Until now, safe harbor rules permitted keeping up to $3,250 in excess. This policy actually rewarded fraud and wasted taxpayers' money. This is especially concerning since I have also found that insurance agents are also using targeted internet ads to fraudulently enroll consumers with false income.
Congress has tightened and simplified the safe harbor rules before. Senate Republicans, through the One Big Beautiful Bill, ended this legal theft for those over the poverty limits. This policy will save over $19 billion in the next 10 years. Senate Republicans also established pre-enrollment verification requirements with flexibilities for special enrollment periods.
This will save over $40 billion. This is good news for the taxpayers but, particularly, fairness in this program.
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