The House passed legislation which seeks to prevent undocumented immigrants from receiving tax credits for buying health insurance on the Obamacare exchanges, by first requiring verification of their legal status to be in the country.

The Verify First Act, authored by Rep. Lou Barletta, R-Pa., passed by a bipartisan vote of 238-184 and now goes to the Senate for consideration.

“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,” Barletta says. “My bill would fix this problem by verifying that an individual is legally entitled to taxpayer-funded benefits before those dollars go out the door.”

Under the Affordable Care Act, the federal government pays the so-called advanced premium tax credits to people before first verifying that they qualify to receive those benefits. If individuals cannot verify their legal immigration status, the Internal Revenue Service then tries to collect the money.

This “pay and chase” model of distributing tax credits has significantly increased costs to taxpayers, Barletta contends. He cites a 2016 Senate Committee on Homeland Security and Governmental Affairs report which found $750 million in taxpayer-funded health care subsidies went to more than 500,000 people who did not qualify for those benefits.

Barletta’s bill requires the Social Security Administration, the Department of Homeland Security and the Department of Health and Human Services to work together to verify first that an individual is a citizen, national, or legal immigrant before giving that individual the advanced health insurance premium tax credit.

The bill also includes protections to ensure that individuals who are legally entitled to these tax credits are not penalized if there is a delay in verifying their documents.

However, Democrats claim Barletta’s bill unfairly targets undocumented immigrants and would ultimately delay coverage for people who might encounter difficulty verifying their information for other reasons, according to The Hill.

“This bill seeks to address a problem that does not exist. Instead, it would harm people by denying or delaying health insurance subsidies to people who need them,” says Rep. Judy Chu, D-Calif.

The House is expected to vote on additional measures outside of the American Health Care Act passed by that chamber last month, including clarifying rules for health care tax credits used by veterans and COBRA continuation coverage users, as well as establish limits on medical malpractice lawsuits, The Hill writes.

While Healthcare.gov states that undocumented immigrants aren’t eligible to buy health insurance on the exchanges or receive premium tax credits, they can apply for coverage on behalf of documented individuals.

However, the California Legislature last year enacted a low allowing families with mixed immigration status to apply for health coverage through the state’s exchange, Covered California.

“Covered California encourages any U.S. citizen or person who is lawfully present to apply for health care coverage through Covered California even if they have family members in their household who are undocumented or not lawfully present,” the website reads.

Moreover, a Wall Street Journal survey last year found that out the 25 U.S. counties with the largest unauthorized immigrant populations, 20 of them have programs that pay for the low-income uninsured to have doctor visits, shots, prescription drugs, lab tests and surgeries at local providers.

“The services usually are inexpensive or free to participants, who must prove they live in the county but are told their immigration status doesn’t matter,” the WSJ writes.

The costs are “significant,” according to WSJ’s interviews with officials in those counties. They say that local initiatives provide nonemergency care for at least 750,000 unauthorized immigrants across those counties, costing them more than $1 billion a year.

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Katie Kuehner-Hebert

Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.