In yet another Obamacare scandal, a North Carolina insurance agent is being investigated by state officials for illegally signing up over 600 individuals in North and South Carolina for insurance through the Healthcare.gov marketplace. This likely fraud allowed the agent to pocket almost $9,000 a month on commissions.
In order to qualify for federal health insurance subsidies, which covers most or all of premiums for low-income people, one must have at least $11,700 in expected income over a year. According to a report by CNBC, the agent was reportedly instructing low-income individuals to apply for the subsidies with projected income generated from panhandling, selling drugs, and even prostitution.
This unusual activity was brought to the attention of North Carolina officials after an insurance software company in California noticed a high volume of applications with addresses at homeless shelters and expected income listed at the threshold of $11,700. Once brought to light, healthcare company Aetna immediately ceased their relationship with the agent and will investigate the matter fully, as does the administrator of Obamacare and the Healthcare.gov exchange, the Centers for Medicare and Medicaid Services.
The agent justified his actions as legal and claims he was simply trying to educate low-income people about eligibility under the new Affordable Care Act laws. However, had the enrollments not been called into question and subject to an investigation, he would have made about $9,000 per month in commissions, or almost $110,000 over the year from these 600 enrollments alone. This curious case calls into question other enrollments facilitated by this agent, but also whether this practice is occurring throughout the rest of the country.
This new case of Obamacare fraud should not be surprising. Last week, the Health and Human Services Office of Inspector General (HHS OIG) warned that the federal system was failing to verify key information of applicants including Social Security numbers, citizenship, and household income before granting tax credits.
Just last month, the Government Accountability Office put out a report detailing how 11 of 12 fake applications submitted to Healthcare.gov in 2014 were enrolled and received federal subsidies. Of the dozen, three were submitted with no documentation but even this didn’t stop the federal government from paying $30,000 in insurance credits to the 11 successful fakes, which were automatically re-enrolled for 2015.
States are faring little better under Obamacare. Back in 2011, federal officials decided that the Massachusetts “Romneycare” exchange needed to be updated to meet Obamacare exchange standards. What followed can only be described as an abject failure as the “upgraded” exchange managed to meet just 5% of its enrollment target at the cost of a meager $224 million in federal funds.