How easy is it to cheat Obamacare or Medicaid to receive highly subsidized federal health insurance? Very, it turns out, according to a U.S. General Accountability Office (GAO) and its undercover operation.
All 10 fictitious Obamacare applicants who worked for GAO were approved for federal government subsidies and issued health insurance coverage, many using phony Social Security and a fictitious employer. Seven out of eight other applicants to Medicaid insurance were also approved.
The tests were done in New Jersey, California, Kentucky and North Dakota this year to check the current 2015 anti-fraud protection systems operated by both Obamacare and Medicaid officials.
In all the states, people with fictitious identities were able to successfully enroll in both Obamacare and Medicaid programs.
The undercover operation disclosed by GAO comes during the second year of sleuthing by the congressional auditing agency to test fraud controls.
The results were similar in a 2014 GAO undercover operation where 11 of 12 applicants were approved under Obamacare using fictitious identities.
As explained by GAO, the agency “created application scenarios with fictitious applicants claiming to have impossible Social Security numbers; claiming to be working for an employer that offers health insurance, but not coverage that meets “minimum essential” standards.” All were approved.
The Obamacare tax subsidies awarded to the bogus applicants amounted to $28,000 per year for each enrollee. Phony Medicaid applicants received $3,4,00 per month or $41,000 in annual subsidies despite the fraudulent applications.
“Our fictitious applicants provided invalid Social Security identities, where their information did not match Social Security Administration records, or claimed they were noncitizens lawfully present in the United States and declined to provide Social Security numbers. In situations where we were asked to provide immigration document numbers, we provided impossible immigration,” the GAO reported.
In both groups, applications were made both online and by phone. GAO focused on New Jersey and North Dakota applicants who had to rely on the federal Obamacare marketplace because they did not create statewide plans.
The GAO also chose to apply for insurance through the state-run California and Kentucky Obamacare insurance plans.
Obamacare rules require substantiation when there are “inconsistencies” in an applicant’s information. The use of counterfeit information did not eliminate any of the applicants, according to GAO.
The agency reported, “we provided counterfeit follow-up documentation, such as fictitious Social Security cards with impossible Social Security numbers, for all 10 undercover applications.”
In one case in Kentucky, the state Obamacare agency approved the applicant even though the Social Security number was reported as invalid by the Social Security Administration.
In Kentucky, GAO reported that “the marketplace told us the Social Security Administration reported that the number was not valid. Despite this, however, the Kentucky marketplace notified our fictitious applicant that the applicant was found eligible for coverage.”
In another case where a totally fictitious employer was chosen, Obamacare officials never followed up to contact the fictitious employer.
California and federal officials told GAO after the findings were released that they took the applicant’s word if they alleged that their employer’s health insurance was substandard and that they were therefore eligible for a highly-subsidized Obamacare policy.
“The marketplaces were not required to communicate with the applicant’s employer to confirm whether the attestation is valid,” GAO reported.
For the Medicaid undercover operation, “we also failed to clear an identity-checking step for six of eight Medicaid applications.”
GAO asked federal officials at the Centers for Medicare and Medicaid Services if they had any opinion of the undercover operation and its results. “They told us the eligibility and enrollment system is generally performing as designed.”
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