Federal Investigators Got Obamacare Subsidies With Fake Identities, Documentation

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In a federal test of the Obamacare application system, investigators who submitted fake identities were awarded Obamacare subsidies 11 times out of 12, according to the General Accountability Office.

The GAO’s undercover investigation of the Centers for Medicare and Medicare Services’ verification controls for Obamacare applications revealed rampant opportunity for fraud. The agency presented its findings to a House Ways and Means subcommittee Wednesday morning.

Investigators submitted 12 applications with fake identities over the phone and online, claiming an income level in each application that qualified the applications for subsidized coverage. Eleven of the applications were approved and the fake customers began receiving premium subsidies for health insurance.

“For each of our 11 approved applications, we paid the required premium to put policies into force, and are continuing to pay the premiums. For the 11 applications that were approved for coverage, we obtained the advance premium tax credit in all cases,” the report states.

The twelfth application was denied because investigators failed to provide a Social Security number.

Six applications were initially denied by, but the GAO was able to get around the porblem easily by submitting the applications again by phone.

CMS asked the 11 fake Obamacare enrollees that made it past the front-end controls for further documentation. GAO’s investigators failed to provide any supporting documents in just three cases. As of July 2014, GAO reported, CMS had verified two enrollees’ fake documentation — but the federal government is still handing out subsidies to all 11 fake enrollees.

Ironically, the Obama administration may have been saved from even worse news by the technical problems that continue to plague Obamacare systems on all levels. Federal investigators wanted to test whether Obamacare assisters working for the federal agencies would advise applicants to lie about their income in order to qualify for premium subsidies — but five out of six times, they were unable to get any help in the first place.

“For example, one in-person assister initially said that he provides assistance only after people already have an application in progress, the report said. “The in-person assister was not able to assist us because website was down and did not respond to follow-up phone calls.”

Just one person told the undercover investigator that his income wouldn’t qualify for a premium subsidy. In fact, one federal contractor processing the applications told the GAO investigators that it does not try to find fraud at all.

Given extensive problems with Obamacare’s verification systems, the ease with which federal investigators were able to get past the Obama administration’s controls is concerning. Taxpayers will pay $36 billion in 2014 alone for Obamacare’s coverage provisions, including subsidies. (RELATED: Feds Have Resolved Less Than 1% Of Flawed Obamacare Applications) 

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Sarah Hurtubise