Earlier this year, investigators from the Government Accountability Office attempted to defraud the Obamacare insurance exchange. They wanted to see if it was possible for someone to get insurance subsidies using false application information.
They found it was shockingly easy, per a New York Times report flagged by Reason.com.
Investigators used false names and fake Social Security numbers, then claimed legal residence in order to successfully set up accounts. They also submitted applications citing income levels that should have been too high to qualify for subsidies. However, the government approved payments to 11 out of 12 false accounts, according to the Times.
During testimony delivered to Congress on Wednesday, the investigators revealed how easy it was to register with fake information. They just called or went online and followed the application process. Five out of their six phone calls were approved. The lone rejected account listed no Social Security number at all.
When Obamacare’s primary insurance coverage expansion mechanisms initially took effect, then-Health and Human Services Secretary Kathleen Sebelius submitted a letter to Vice President Joe Biden certifying that “when a consumer applies for insurance affordability programs, including advance payments of the premium tax credit and cost-sharing reductions, the Marketplace [the exchanges] verifies application information provided by the consumer.”
It’s clear that that isn’t happening. Even worse, the GAO is still paying its share of the premiums on these dummy accounts because the subsidy verification system hasn’t yet discovered the fraudulent accounts. According to the report, one federal contractor responsible for weeding out fake applications confessed “it does not seek to detect fraud and accepts documents as authentic unless there are obvious alterations.”
In short, the system is so broken, it doesn’t even know that it needs to be fixed.
