For the second time, phony applicants with fake identities and documentation were able to receive Obamacare coverage and taxpayer subsidies through the federal exchange. The fraudsters were actually investigators in an undercover study by the nonpartisan Government Accountability Office.
Their report is a continuation from July 2014, when the agency revealed that 11 times out of 12, federal investigators with fake documents were able to get through the federal Obamacare exchange HealthCare.gov and were awarded with subsidies. Once again, the federal Obamacare exchange automatically renewed all 11 fake applicants for coverage in 2015 — and some were even awarded larger subsidies for their insurance premiums. (RELATED: Federal Investigators Got Obamacare Subsidies With Fake Identities, Docs)
Of the 11 fake applications, six were later flagged for termination, but armed with fake documents, the GAO was able to get five applicants reinstated. Those five applicants were given higher subsidies than in 2014. In all, the agency was able to get a total of about $30,000 in Obamacare subsidies, as well as eligibility for lower costs at medical providers for with their fake applicants.
After last year’s initial study revealed the extensive verification problems at HealthCare.gov, the administration pledged that it would fix the bugs. The Centers for Medicare and Medicaid Services, which administers Obamacare, has dropped hundreds of thousands of illegal immigrants from exchange coverage after those failed several opportunities to verify their legal immigration status, but the GAO study reveals that fraudulent applications may remain.
Federal investigators intentionally failed to submit all the required verification documentation to HealthCare.gov for seven of its 11 successful applicants, according to the report, but still the administration did not cancel their subsidized coverage.
“Overall,” the report found, “the Marketplace did not terminate any coverage for several types of inconsistencies, including Social Security data or incarceration status.”
Investigators also noted that the information given out by HealthCare.gov to its fake applicants was incorrect in three cases. Obamacare enrollees must use information from HealthCare.gov to file income taxes and accurately report their subsidies, but several applicants in the GAO’s case were given incorrect coverage periods and subsidy amounts.
GAO audits and investigations chief Seto Bagdoyan said in prepared testimony to the Senate Finance Committee, provided to the Associated Press, that HealthCare.gov is simply not set up to detect fraud at all.
The contractor which processes documents for HealthCare.gov “is not required to seek to detect fraud,” Bagdoyan writes. “The contractor personnel involved in the document-verification process are not trained as fraud experts and do not perform antifraud duties.”
The Senate Finance Committee will hold a hearing Thursday morning on HealthCare.gov identity controls. Chairman of the committee, Utah Republican Sen. Orrin Hatch, told The AP that the GAO’s investigation displays the Obama administration’s “negligence” on the issue and “calls into question the legitimacy of the health law’s enrollment numbers and challenges the integrity of the website’s security checks.”
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