Issues

Healthcare.gov Approves Fake Applicants in Undercover Investigation, Again

Applications also approved for tax credit subsidies

AP

Healthcare.gov and its state marketplaces approved health care coverage and subsidies for nine fake applicants in another Government Accountability Office sting, according to a report from the agency.

The investigative agency created 12 fake identities and sought to obtain coverage for them during the special enrollment period.

"For all our fictitious applicant scenarios, we sought to act as an ordinary consumer would in attempting to make a successful application," the investigative agency said. "For example, if, during online applications, we were directed to make phone calls to complete the process or to mail the application, we acted as instructed."

The Affordable Care Act requires that the Marketplace validate application information to determine eligibility by checking Social Security numbers, citizenship or immigration status, and household income.

The 12 applications included fictitious copies of Social Security cards, driver's licenses, and proof of income. Only three applications were denied, and six were asked for further documentation.

"In some instances we provided fictitious documents to the federal and selected state-based marketplaces to support the [special enrollment period] triggering event and were able to obtain and maintain subsidized health coverage," the agency said.

Ultimately, nine of the 12 fake applications were approved. The applications were submitted to the federal exchange as well as two selected state-based marketplaces in Washington, D.C., and California.

The nine applications that were approved were also cleared for advance premium tax credit subsidies, which averaged about $1,580 per month, or $18,960 per year.

Last year, the Government Accountability Office conducted a similar investigation and found that Healthcare.gov approved coverage for fictitious applicants.

"[The Centers for Medicare and Medicaid Services] accepted fabricated documentation with these applications without attempting to verify its authenticity and enrolled fake applicants while handing out thousands of dollars in premium tax subsidies," said Sen. Orrin Hatch (R., Utah) at a hearing on July 16, 2015.

"Now a year later, GAO has reported that nothing has changed and that, if anything, there are more problems," he said. "Worst of all, the administration has known about these problems for over a year now and has apparently not taken the necessary steps to rectify them."

"[The Department of Health and Human Services] takes seriously its commitment to ensuring the program integrity of the Marketplaces established by the Affordable Care Act," said Jim Esquea, the assistant secretary for legislation at the department.

"While [special enrollment periods] provide a critical pathway to coverage for qualified individuals who experience qualifying events, it's equally important that [special enrollment periods] are not misused or abused," he said. "HHS is continually monitoring the health and operations of the Marketplace and has taken several steps to analyze and strengthen current rules and procedures to ensure that only those who are eligible enroll through [special enrollment periods]."