One-third of Obamacare applications in 2014, totaling $1.7 billion in federal subsidies, had unverified identifications, meaning fraudsters and illegal immigrants could be taking advantage of the program, a federal watchdog reported Wednesday.
The Government Accountability Office found that 431,000 applications had identification inconsistencies. And Congress’ investigative arm was able to scam the Obamacare identification process 11 of 12 times during the 2014 enrollment period, according to the report.
“With unresolved inconsistencies, [the Centers for Medicare and Medicaid Services] is at risk of granting eligibility to, and making subsidy payments on behalf of, individuals who are ineligible to enroll in qualified health plans,” the report stated.
The GAO, which studied the verification process used by the Centers for Medicare and Medicaid Services to verify the identities of individuals applying for Obamacare, found that the administration’s system for detecting fraud is not being used fully and could be wasting taxpayer money.
When a person applies for Obamacare, the data services hub checks a person’s identification information with various federal databases to verify his identity. The report says CMS doesn’t track or analyze those queries, which show inconsistencies in identification information that could be signs of fraud.
“In not doing so, [the center] foregoes information that could suggest potential program issues or potential vulnerabilities to fraud, as well as information that might be useful for enhancing program management,” the report said.
As a part of their investigation, GAO officials applied for Obamacare online or by phone. Those fake enrollees received healthcare coverage, subsidized by the federal government, through 2014. When asked for documents to resolve inconsistencies in their identification information, GAO sent fake documents or, in some cases, no documents at all and still received healthcare coverage.
The 11 fake enrollees cost the government a total of $30,000.
According to the report, one of the major problems is the Centers for Medicare and Medicaid Services uses a contractor to detect fraud but doesn’t require that contractor to have the ability to direct fraud. The agency has not done a fraud risk assessment on the Obamacare enrollment process.
“Until such an assessment is done, [the agency is] unlikely to know whether existing control activities are suitably designed and implemented to reduce inherent fraud risk to an acceptable level,” the report stated.
The report recommends the Department of Health and Human Services perform a fraud risk assessment, track the amount of applications rejected for identification inconsistencies, find a way to recoup the costs lost to fraud and find a way to determine if an applicant is a prisoner and eligible for subsidies.
Republicans in Congress were shocked by the report.
“One thing is clear — CMS has been asleep at the wheel with billions of taxpayer dollars at risk,” said Rep. Fred Upton, R-Mich. and chairman of the House Energy and Commerce Committee.
“This laundry list of concerns showcases systemic problems throughout Obamacare, and broad mismanagement at CMS. These complex, massive problems represent what we’ve known all along — Obamacare is full of broken promises.”
Senate Finance Committee Chairman Orrin Hatch, R-Utah, added the report is proof the administration is putting enrollment numbers ahead of any other concerns about Obamacare.
“Billions of taxpayer dollars continue to be at risk due to the administration’s gross inability to implement a working verification system on the federal exchange,” Hatch said. “The administration owes it to taxpayers to follow GAO’s recommendations and come clean on this egregious waste of taxpayer dollars.”
