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Obamacare Marketplaces 'Vulnerable to Fraud,' Audit Finds

Obamacare Marketplaces 'Vulnerable to Fraud,' Audit Finds

By    |   Monday, 12 September 2016 06:22 PM

The Obamacare marketplaces are startlingly "vulnerable to fraud," allowing scammers to apply for coverage with a phony name and made-up social security numbers, CNBC.com reported.

The susceptibility was uncovered in two government audits that looked at the 2015 and 2016 Obamacare coverage years, according to the outlet.

The investigation showed in several cases this year, people using fake names who had not filed tax returns for 2014 were still able to get Obamacare tax credits to help pay their monthly premiums for 2016 – the first year applicants for subsidies have had to prove they filed federal tax returns from prior coverage years.

GOP lawmakers are outraged, CNBC.com reported.

"It's déjà vu all over again as it seems the situation only continues to get worse, and we all are paying the price," House Energy and Commerce Committee Chairman Fred Upton, R-Mich., tells CNBC.com.

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

And the Ways and Means chairman, Texas GOP Rep. Kevin Brady, told CNBC.com the findings prove what lawmakers already knew: "The Obamacare federal exchanges have been riddled with problems since Day 1."

"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.

According to CNBC.com, Governmental Accountability Office investigations found in the 2015 coverage year, HealthCare.gov, which serves residents of 38 states, or the state-run exchanges of California and Kentucky, "approved each of 10 fictitious applications GAO made for subsidized health plans."

"Although 8 of these 10 fictitious applications failed the initial online identity-checking process, all 10 were subsequently approved," GAO said.

Four of the phony applications used Social Security numbers that had never been issued, according to the audit.

The GAO said officials from the Centers for Medicaid & Medicare Services, California, Kentucky, and North Dakota, the marketplace or Medicaid office "only inspect for supporting documentation that has obviously been altered."

"Thus, if the documentation submitted does not show such signs, it would not be questioned for authenticity," it said, per CNBC.com.

For the 2016 coverage year, HealthCare.gov or the California exchange "initially approved coverage and subsidies for GAO's 15 fictitious applications," though three weren't able to put their policies into effect because their first month's premium payments weren't processed.

Four of the applications used fictitious identities that had been used to get subsidized coverage in 2014, the investigation found.

"Although none of the fictitious applications filed a 2014 tax return, all were approved for 2016 subsidies," GAO said.

"As the GAO mentioned in their report, the results cannot be generalized to the overall population of applications or enrollees," the Department of Health and Human Services, which oversees Obamacare, replied in a letter responding to the GAO's findings, CNBC.com reported.

"HHS takes seriously its responsibilities to protect taxpayer funds, while making coverage available to eligible individuals."

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The Obamacare marketplaces are startlingly "vulnerable to fraud," allowing scammers to apply for coverage with a phony name and made-up social security numbers, CNBC.com reported.
Obamacare, healthcare, reform, fraud, ACA
Monday, 12 September 2016 06:22 PM
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