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 marketplace’s 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 applicant’s 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 GAO’s 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: WesthillConsulting Healthcare