Probe: Obamacare fails to catch fraud
WASHINGTON — Phony applicants that investigators signed up last year under President Obama's health care law got automatically re-enrolled for 2015. Some were rewarded with even bigger taxpayer subsidies for their insurance premiums, a congressional probe has found.
The nonpartisan Government Accountability Office says 11 counterfeit characters that its investigators made up last year were automatically re-enrolled by HealthCare.gov, even though most had unresolved documentation issues. In Obama's terms, they got to keep the coverage they had.
Six of those later were flagged and sent termination notices. But GAO said it was able to get five of them reinstated by calling HealthCare.gov's consumer service center. That seemed to be a weak link in the system.
The five bogus beneficiaries who were reinstated even got their monthly subsidies bumped up a bit, although GAO did not ask for it. The case of the sixth fake enrollee who appealed was under review.
HealthCare.gov does not appear to be set up to detect fraud, GAO Audits and Investigations Chief Seto Bagdoyan said in prepared testimony for a Senate Finance Committee hearing Thursday. A copy was provided to The Associated Press.
HealthCare.gov's document-processing contractor “is not required to seek to detect fraud,” said Bagdoyan. “The contractor personnel involved in the document-verification process are not trained as fraud experts and do not perform antifraud duties.”
Administration officials told GAO there has been “no indication of a meaningful level of fraud” in the program, Bagdoyan said.
Federal health care subsidies go directly to insurers, so the money does not end up in the bank accounts of individual enrollees. But health insurance is a valuable product in and of itself, with the cost of family coverage averaging close to $17,000 a year.
Finance Committee Chairman Orrin Hatch, R-Utah, said the GAO's investigation reveals “negligence” by the Obama administration, which “calls into question the legitimacy of the health law's enrollment numbers and challenges the integrity of the website's security checks.”
Last year, when GAO first disclosed that it had succeeded in signing up fake beneficiaries, the administration said it would work to strengthen HealthCare.gov's verification checks.
Late Wednesday, the administration said it looks forward to working with GAO to improve safeguards for health insurance sign-ups. It noted that the online system had initially flagged applications from the undercover investigators.
HealthCare.gov is an online insurance marketplace used by residents of 37 states to get subsidized private coverage under the health care law.
Although the administration has terminated coverage for more than 200,000 people who could not prove their citizenship or legal immigrant status, and some 300,000 have had their subsidies changed because of discrepancies over reported income, GAO's bogus beneficiaries largely evaded that dragnet.