Watchdog: Obamacare Exchanges Fail to Detect Counterfeit Documents
Obamacare exchanges are failing to verify key enrollment information, according to a new report by the Government Accountability Office (GAO). This new report is the latest in a long line finding that controls on federal and state Obamacare exchanges are abysmal.
As part of its review, GAO tested application and enrollment controls on the federal exchange and two state exchanges (California and Kentucky). Ten fictitious applicants were created to test whether verification steps including validating an applicant’s Social Security number, verifying citizenship, and verifying household income were completed properly.
In order to test these controls, GAO’s test applications provided fraudulent documentation:
“For each of the 10 undercover applications where we obtained qualified health-plan coverage, the respective marketplace directed that our applicants submit supplementary documentation… we provided counterfeit follow-up documentation, such as fictitious Social Security cards with impossible Social Security numbers, for all 10 undercover applications.”
As the report notes, all ten applications remained enrolled on Obamacare even though fraudulent or insufficient documentation was provided:
“For all 10 of these undercover applications, we maintained subsidized coverage beyond the period during which applicants may file supporting documentation to resolve inconsistencies.”
As a result, each applicant received the Obamacare premium tax credit and cost-sharing reduction subsidies, without being properly verified. The ten applicants received a total of $2,300 in tax credits per month.
This is not the first time that watchdog groups have found Obamacare exchanges have failed to properly verify enrollment and eligibility. At least four other reports released this year have raised alarms about existing Obamacare controls:
- An August 10, 2015 report by the Health and Human Services Office of the Inspector General (HHS OIG) found that the federal Healthcare.gov is failing to verify applicant's Social Security numbers, citizenship, and household income in order to properly distribute tax credits.
- A July 16, 2015 audit released by GAO found that 11 of 12 fictitious applicants received coverage for the entire 2014 coverage period despite many using fraudulent documents, and others providing no documentation at all. From these 11 test applicants alone, erroneously Healthcare.gov paid $30,000 in tax credits.
- A June 16, 2015 report released by HHS OIG found that $2.8 billion worth of subsidies and payments had been made in 2014 without verification.
- A May 11, 2015 report by the Treasury Inspector General for Tax Administration found that the IRS was failing to verify whether individuals had even bought health insurance before distributing tax credits.