House advances bill stopping ObamaCare's insurance subsidies

That vote was expected to set up a final vote on the bill itself later today. But House leaders have pushed a final vote until Thursday, after deciding the House would not consider a short-term continuing spending resolution on Thursday.

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The legislation is a GOP protest against an Obama administration rule issued in July, which gave states running their own exchanges some flexibility when checking whether people are eligible for insurance subsidies.

Under current law, people are eligible for subsidies if their employer does not offer an approved health plan, and if their income level is not too high. Republicans said the July rule could allow some ineligible people to obtain subsidies, and have warned this will drive up the cost of the healthcare law.

"Because fraud and abuse have been rampant in just about every program that is administered by the Department of Health and Human Services, including Medicare and Medicaid, a certified verification system being in place prior to the implementation to the Affordable Care Act is critical," Rep. Michael Burgess (R-Texas) said during the rule debate.

"The President's strategy on the healthcare law is now: Trust, don't verify."

Since the July rule came out, the Centers for Medicare & Medicaid Services (CMS) has said Republicans are over-stating the affect of the regulation relating to subsidy eligibility. According to CMS, insurance exchanges run by the federal government in more than 30 states will continue to run checks on income and health insurance status on anyone seeking subsidies.

The regulation issued in July deals only with the roughly 17 state-run insurance exchanges. Those exchanges are still required to examine income data for people seeking subsidies.

The rule says that if people attest to having an income more than 10 percent lower than what government documents seem to indicate, states have the flexibility of not asking each and every one of those people for more data to verify their income level.

Instead, the rule says states have the option of conducting a random sample of these people who are attesting lower income levels. Those randomly sampled would be asked for more documentation to see if they qualify for subsidies, according to CMS.

This raises the possibility that some who are not pressed for more information may receive subsidies even though they are not eligible. However, CMS says the IRS would be able to verify people's income after the fact, and reclaim any subsidy overpayments made to people who may have understated their income. CMS also notes that this flexibility is only meant to be in place for one year.

For all of these reasons, CMS is anticipating that initial verification processes would cover everyone, and if some states use the federal government's flexibility, that only a small number of people might initially escape further scrutiny.

While CMS says the GOP is overstating its complaints about the rule, House Democrats did not defend the rule today, and largely ignored the issue during debate on the rule. Rep. Jared Polis (D-Colo.) made a quick statement noting the Obama administration's veto threat against the bill, and then spent most of the debate time arguing in favor of immigration reform.

The administration on Tuesday said President Obama would veto the bill if it were presented for his signature, and that it sees the bill as another GOP attack on the healthcare law.

The White House said the Secretary of Health and Human Services "has already put in place an effective and efficient system for verification of eligibility for premium tax credits and cost sharing reductions." It also said the bill creates "vague standards" that the government would have to follow to ensure eligibility, which it said would slow access to healthcare.

— This story was updated at 4:48 p.m.