Audit: Health care subsidies vulnerable to fraud

WASHINGTON (AP) — More troubles for the health care overhaul. Subsidies to help people buy insurance under the law may be vulnerable to fraud, a Treasury Department watchdog said today in a report suggesting that concerns about the law are far from over.

The rollout of the law has been hurt by canceled policies and problems with the federal website used by people to enroll in health plans, causing political headaches for President Barack Obama and for Democrats in Congress.

The new problems concern subsidies that are available to low- and medium-income people who buy health insurance through state-based exchanges that opened in October.

Those subsidies are administered by the Internal Revenue Service in the form of tax credits, and that's where the trouble arises.

"The IRS' existing fraud detection system may not be capable of identifying [Affordable Care Act] refund fraud or schemes prior to the issuance of tax return refunds," said the report by J. Russell George, the Treasury inspector general for tax administration.