Obamacare Fraud: Fake People Can Apply for Coverage

Several cases of fake people applying for Obamacare tax credits over the last two years have exposed the Affordable Care Act’s extreme susceptibility to fraud, according to a new report from the Government Accountability Office.

The GAO’s investigation sought to verify whether ineligible or nonexistent persons could enroll in Obamacare health coverage. During the 2015 coverage year, “10 fictitious applications” were approved for coverage after the investigators sent them in for enrollment. But four of these people used Social Security numbers that had never existed and several of them had not filed their tax returns for 2014.

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

“Although 8 of these 10 fictitious applications failed the initial online identity-checking process, all 10 were subsequently approved,” the GAO said in its report. “Other applications obtained duplicate enrollment or obtained coverage by claiming their employer did not provide insurance that met minimum essential coverage.”

In response to the GAO’s findings, Obamacare’s overseer, the U.S. Department of Health and Human Services, issued a letter stating, “HHS takes seriously its responsibilities to protect taxpayer funds, while making coverage available to eligible individuals.”

“While the GAO has not provided details on the fictitious persons they used nor made recommendations to address the findings in this report, HHS continues to make ongoing improvements to strengthen program integrity efforts and marketplace controls,” the letter continued.

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House Ways and Means Committee Chairman Kevin Brady (R-Texas), didn’t buy the Department’s excuse.

“This report unfortunately tells us more of what we already know — that the Obamacare federal exchanges have been riddled with problems since Day One,” Brady said in a statement. “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.”

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But the ease with which the GAO’s investigators received approval for their fake enrollment applications raises several troubling questions about any other ineligible persons that may have slipped through the system and gained health coverage and subsidies.

The GAO’s methodology used in this investigation echoed the methodology used for a report released in February which revealed that at least $750 million in ACA subsidies were doled out to illegal immigrants or individuals whose legal status was never properly documented or verified. That report also found that more than 500,000 people received the money in advanced premium tax credits.

This latest Obamacare scandal highlights earlier fears that illegal immigrants could wind up enrolled in the system — despite President Obama’s vehement declarations that illegal immigrants would be unable to participate in the insurance exchanges. In fact, HealthCare.gov explicitly states that “undocumented immigrants aren’t eligible to buy Marketplace health coverage, or for premium tax credits and other savings on Marketplace plans.”

The newly exposed vulnerability to fraud has Republicans furious.

“When a fire is raging, the first thing you do is grab a hose — but there is no urgency by the administration to address the inferno of fraud. 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-Michigan), said in a statement. “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.”