Federal undercover investigation signs up fake applicants for ACA coverage, subsidies

In undercover tests of the new federal health insurance marketplace, government

investigators have been able to procure health plans and federal subsidies for fake
applicants with fictitious documents, according to findings that will be disclosed to
lawmakers Wednesday.
The results of the inquiry by the Government Accountability Office are evidence of
still-imperfect work by specialists intended to assist new insurance customers as well
as government contractors hired to verify that coverage and subsidies are legitimate.
The GAO also pointed to flaws that linger in the marketplaces Web site,
HealthCare.gov.
According to testimony to be delivered before a House Ways and Means subcommittee,
undercover GAO investigators tried to obtain health plans for a dozen fictitious
applicants online or by phone, using invalid or missing Social Security numbers or
inaccurate citizenship information.
All but one of the fake applicants ended up getting subsidized coverage and have
kept it. In one instance, an application was denied but then approved on a second try.
In six other attempts to sign up fake applicants via in-person assisters, just one
assister accurately told an investigator that the applicants income was too high for
a subsidy.
In their testimony, GAO officials plan to emphasize that the findings are preliminary
and that they are continuing the investigation before reaching final conclusions,
probably next year. The tests have been done in several states. Because the work is
not finished, the GAO is not identifying the states.
House Republicans were eager for early information because the findings reinforce
their contention that the Obama administration set up the health insurance marketplace
in ways that leave it vulnerable to fraud and waste of taxpayer money. The allegation
that HealthCare.gov does not properly verify the identity and eligibility of consumers
has been one of several lines of attack that congressional Republicans have used in
trying to discredit the 2010 Affordable Care Act and the way administration officials
set it in motion.
The GAO investigation was requested before the marketplace opened in the fall, by
House Ways and Means Chairman Dave Camp (R-Mich.); Rep. Charles W. Boustany Jr. (R-
La.), chairman of the Ways and Means oversight subcommittee; and Sens. Tom Coburn (R-
Okla.) and Orrin G. Hatch (R-Utah).
Even before the GAO delivered the early findings, the lawmakers were seizing them as
fresh ammunition. We are seeing a trend with Obamacare information systems: under
every rock, there is incompetence, waste and the potential for fraud, Camp said in a
statement. Now, we learn that in many cases, the exchange is unable to screen out
fake identities or documents.
A spokesman for the federal agency that oversees the marketplace, the Department of
Health and Human Services Centers for Medicare and Medicaid Services, noted that the
procedures for ensuring that the applicants information is accurate remain a work in
progress. We . . . will work with GAO to identify additional strategies to strengthen
our verification processes during this first year of the Affordable Care Act, CMS
spokesman Aaron Albright said.
The GAOs account of fictitious applicants obtaining subsidized coverage goes beyond a
related problem that surfaced this spring and that the investigators also cited: The
government may be paying incorrect insurance subsidies to a significant share of the
5.4 million Americans who signed up for health plans for this year through the federal
marketplace.
The GAO testimony contains updates on that problem, saying that, as of mid-July, about
2.6 million inconsistencies existed among applicants who had chosen a health plan
and that 650,000 of them had been resolved.
Read More: Westhill Consulting Healthcare