Instead, the new insurance marketplaces operated by states and the District of Columbia will take the consumer's word that they qualify for the subsidies, The Washington Post reported.
The announcement came on Friday without fanfare with the Department of Health and Human Services publishing the notification in the Federal Register.
Verification plans for the taxpayer subsidies won't go into effect until 2015 for those earning about $45,000 to purchase health insurance, or earning $15,000 to qualify for Medicaid in the District and 23 participating states.
The move comes days after another Obamacare snag was announced on Wednesday when the administration delayed until 2015 the employer mandate that required businesses with more than 50 full-time workers to pay stiff fines for failing to providing insurance.
"As crunch time is coming, they're just muddling through and figuring out short cuts," said Ian Spatz, a senior adviser at Manatt Health Solutions, told The Post. "It might not be elegant, but this is how they're trying to make the law work."
Timothy Jost, a law professor at Washington and Lee University in Lexington, Va., and a consumer advocate, said it's not unprecedented for the government to use the honor system, and compared it to reporting cash tips to the Internal Revenue Service.
"An awful lot of the economy is a cash economy,” Jost said. "If we had to verify every statement that was made to the IRS, our economy would collapse."
The announcement on Friday -- at the end of the Fourth of July holiday – is a recurring tactic for the Obama administration to deliver information likely to be criticized by Republicans or the media.
Friday nights often became the preferred timeline for massive document dumps when Congress was investigating the Justice Department for the "Fast and Furious" scandal, Politico reported.