Obamacare Free Stuff——100% of Fictitious Enrollees Obtained Subsidies In GAO Investigation

By Tyler Durden

A recent “undercover enrollment” investigation conducted by the Government Accountability Office (GAO) found that pretty much anyone can sign up for Obamacare and receive taxpayer funded incentives without having to worry about pesky little details like proving citizenship, identity or income-based needs.  In fact, the study found that every single one of its 15 fictitious Obamacare applications were actually approved for coverage despite intentional application omissions, fictitious identification and citizenship documentation, etc.  Moreover, all of the applications were also approved for federal subsidies which totaled $60,000 per year.

Per the GAO:

Our undercover testing for the 2016 coverage year found that the eligibility determination and enrollment processes of the federal and state marketplaces we reviewed remain vulnerable to fraud, as we previously reported for the 2014 and 2015 coverage years. For each of our 15 fictitious applications, the marketplaces approved coverage, including for 6 fictitious applicants who had previously obtained subsidized coverage but did not file the required federal income-tax returns. Although IRS provides information to marketplaces on whether health-care applicants have filed required returns, the federal Marketplace and our selected state marketplace allowed applicants to instead attest that they had filed returns, saying the IRS information was not sufficiently current. The marketplaces we reviewed also relaxed documentation standards or extended deadlines for filing required documentation. After initial approval, all but one of our fictitious enrollees maintained subsidized coverage, even though we sent fictitious documents, or no documents, to resolve application inconsistencies.

For each of our 15 fictitious applications, the federal or state-based marketplaces approved coverage at time of application—specifically, 14 applications for qualified health plans, and 1 application for Medicaid.  Each of the 14 applications for qualified health plans was also approved for APTC subsidies. These subsidies totaled about $5,000 on a monthly basis, or about $60,000 annually. These 14 qualified-health-plan applications also each obtained CSR subsidies, putting the applicants in a position to further benefit if they used medical services.

Of the 15 fictitious applications submitted by the GAO, all 15 were initially approved for coverage and subsidies.  That said, 3 fictitious enrollees were subsequently kicked out of the exchanges after payments were not processed correctly.  Frankly we’re shocked that payment is even necessary…these exchanges are heartless.

All but one of our fictitious enrollees maintained subsidized coverage, even though we sent fictitious documents, or no documents, to resolve application inconsistencies.

GAO Obamacare Fraud

Of the 15 applications submitted, 4 intentionally omitted income tax return documentation required to approve income-based subsidies.  Despite the omission, the GAO found that all 4 enrollees were able to obtain and maintain healthcare coverage and subsidies.

GAO Obamacare Fraud

For the other 8 applicants, the GAO made up identities to test whether people submitting fake citizenship and/or social security documentation or those applying for coverage in multiple states could still receive coverage.  Turns out that every single one of these applications was also approved and all but 1 was able to maintain coverage.  Moreover,  these seven successful applicants were able to obtain subsidies totaling about $33,000 annually.

GAO Obamacare Fraud

The following chart highlights, by individual, what fictitious documentation was submitted to each exchange and when “required” documentation was simply withheld all together.

GAO Obamacare Fraud

Just to highlight why we should care, the GAO points out that roughly 1.4mm people received Obamacare subsidies in 2015 even though they had failed to submit required tax information.  But it’s only $4BN…just a tiny needle in the federal government’s haystack of fraud and abuse. 

GAO Obamacare Fraud

Of course, the California exchange attempted to discredit the GAO study by pointing out the small sample size.

GAO Obamacare Fraud

Dear California, we too would be worried about the small sample size but for the fact that 100% of the fictitious enrollees were able to get coverage and subsidies…that’s relevant.

House members Fred Upton (R-Michigan) and Kevin Brady (R-Texas) commented on the new GAO study to CNBC:

“It’s deja vu all over again as it seems the situation only continues to get worse, and we all are paying the price,” said House Energy and Commerce Committee Chairman Fred Upton, R-Mich.

“The nonpartisan watchdog reports underscore that there is still tremendous weakness in how the federal marketplace operates and immediate action must be taken to ensure all avenues for fraud are impossible.”

When a fire is raging, the first thing you do is grab a hose — but there is no urgency by the administration,” Upton said.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, said, “This report unfortunately tells us more of what we already know — that the Obamacare federal exchanges have been riddled with problems since Day One.”

“The fact that the exchanges are so susceptible to fraud is just further proof that the president’s health-care law is not working as promised — and wasting billions of taxpayer dollars in the process,” Brady said.

And, of course, the Department of Health and Human Services and the Centers for Medicare and Medicaid Services maintain that they have a “robust verification process” aimed at “protecting taxpayer dollars.”

The marketplace takes seriously the responsibility to protect taxpayer funds, while making coverage available to eligible people. We have a robust verification process to make sure people get benefits they are eligible for while protecting taxpayer dollars.”

“Within HealthCare.gov we have multiple checks to verify that applicants provide correct eligibility information on their applications, and GAO deliberately circumvented those checks by giving false information, which is against the law for actual applicants.”

“We appreciate the work the GAO and HHS Office of Inspector General to improve marketplace operations and take action when provided with recommendations or other information.  That’s why we have repeatedly requested, and remain disappointed, that we still have not received specific details or recommendations from the GAO relating to their fraudulent applications. Specific and actionable information will enable us to analyze and understand what occurred and whether we can make improvements to our processes or procedures.”

“As recommended by the GAO, we are applying their marketplace Fraud Risk Assessment to areas of eligibility and enrollment to identify and prioritize key areas for potential risk in the marketplace.  We are also working closely with issuers through the Healthcare Fraud Prevention Partnership to identify trends, schemes and specific bad actors.”

Well, HHS and CMS, if 100% of people can scam their way through your “robust verification process” we would hate to see the results of a half-assed effort on your part. 

The full study from the GAO can be read below:

Source: “Rampant Fraud” Exposed In Obamacare Exchanges: 100% Of Fictitious Enrollees Obtained Subsidies