Investigative Group

Obamacare Officials Gave Tax Credit Payments To Prison Inmates, Illegal Immigrants

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Obamacare health exchanges gave more than $100 million in tax credit payments to non-tax filers without checking their identities, and $22 million in tax credits to documented inmates and illegal immigrants.

Federal health care officials said verifying Obamacare enrollees’ identities was irrelevant.

A new Treasury Inspector General for Tax Administration (TIGTA) report found state and federal Obamacare exchange officials gave $112 million in advanced premium tax credit payments to more than 35,000 people who didn’t file a tax return in 2014, despite being required to do so.

Exchange officials also gave $21.8 million in tax credit payments to more than 11,000 non-filers the verification process revealed were here illegally or incarcerated, relying on applicants’ statements that they weren’t in prison instead of federal records.

Centers for Medicare and Medicaid (CMS) officials told the IG that Affordable Care Act (ACA) identity documentation isn’t a factor in health insurance eligibility. (RELATED: Four Of 24 Obamacare Co-Ops Remain Open)

“When we provided the results of our review to [CMS], management stated that the ACA does not require the exchanges to verify an applicant’s identity,” the IG said. “Management indicated that identity information is not a requirement or a factor in the determination for an individual’s eligibility for health insurance coverage through the exchanges.”

The 35,276 ACA tax credit recipients who didn’t file tax returns in 2014 and had no identity verification represented 13.5 percent of the 261,872 tax credit recipients the IG analyzed among 2014 non-filers, according to the IG. More than 280,000 total ACA tax credit recipients never filed 2014 taxes, and the vast majority of them (75 percent) were in the federal exchange.

The refundable premium tax credit is one of the main pitches Obamacare supporters used to market the health care law as attractive and affordable for lower- and middle-class families.

]The IG discovered exchange officials relied on tax credit recipients’ claims that they weren’t incarcerated, as the Social Security Administration data exchange officials use is unreliable. CMS officials told the IG they will provide additional information on the IG’s citizenship findings, but haven’t done so yet.

The exchanges cut off coverage for 6,128 — or 54 percent — of the 11,388 enrollees who failed to meet citizenship or incarceration requirements, but haven’t terminated coverage for the rest.

All Obamacare applicants must be lawful citizens or residents of the U.S., live in the state where the exchange is located, and not be imprisoned.

The Government Accountability Office (GAO) and the Health and Human Services IG have raised similar concerns in past reports about the Obamacare exchanges’ failure to test ACA applicants’ eligibility. GAO’s auditors, for instance, obtained coverage for 10 of the 12 fictitious people they attempted to enroll in Obamacare. (RELATED: NY Obamacare Site Risking Personal Info)

Utah Republican Sen. Orrin Hatch, chairman of the Senate Committee on Finance, requested the TIGTA report to make sure people applying for ACA coverage and tax credits are who they claim to be.

Andrew Slavitt, CMS’s former acting administrator, outlined CMS’s verification approach in a letter to the IG, but didn’t address the specific problems raised in the IG report. The IG issued no recommendations.

“Moving forward, CMS remains committed to improving the performance and outcomes of the state-based and federally facilitated marketplaces as well as continuing to protect the integrity of taxpayer dollars,” Slavitt wrote.

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