The Centers for Medicare and Medicaid Services (CMS) failed to properly distribute $2.8 billion worth of subsidies and payments to individuals on Obamacare according to a report by the Office of the Inspector General (OIG). During the first four months of these payments, the OIG examined a sample size of 100 payee group-months and found that CMS failed to ensure the correct amounts and that enrollees were actually eligible.
As the report notes, the OIG found that CMS did not have proper mechanisms in place to ensure enrollees were eligible for Cost Sharing Reductions (CSRs) and Advance Premium Tax Credits (APTCs):
“CMS did not have systems in place to ensure that financial assistance payments were made on behalf of confirmed enrollees or for State marketplaces to submit enrollee eligibility data for financial assistance payments.”
Because CMS did not have verification mechanisms in place or the necessary enrollment data, the OIG found that huge amounts of federal funds may been misused or improperly allocated:
“We could not verify that CMS correctly applied any of the nearly $2.8 billion in financial assistance payments that it made during the period January through April 2014.”
CMS has indicated that they will be unable to amend these payments until 2016 at the earliest due to various problems with insurance providers and shows no expectations of speeding up the process:
“Due to the risk of QHP issuers providing inaccurate data to calculate actual CSR amounts, CMS stated that it has postponed reconciling advance CSR payments made to all QHP issuers for the 2014 benefit year until April 30, 2016.”
With a lack of complete, verifiable data, CMS was unable to monitor these payments and address any potential errors that arose in a timely manner costing taxpayers millions of dollars. As ATR’s Alexander Hendrie recently noted, a previous IG report found the IRS had failed to properly administer Obamacare tax credits by giving them to individuals who were not actually eligible. With potentially billions of dollars and individuals’ livelihoods at stake, the federal government has proved wholly incapable of administering financial assistance and subsidy payments.