Fake Applications for ObamaCare Tax Subsidies Show How Vulnerable Health Care Law is to Fraud & Abuse

Washington, DC - Today, Ways and Means Committee Chairman Dave Camp (R-MI), Oversight Subcommittee Chairman Charles Boustany Jr., M.D. (R-LA), Senate Finance Committee Ranking Member Orrin Hatch (R-UT) and Senate Committee on Homeland Security & Government Affairs Committee Ranking Member Tom Coburn (R-OK) released the preliminary results of a Government Accountability Office (GAO) undercover examination of enrollment controls in the ObamaCare health care exchanges.

As part of a “secret shopper” investigation, GAO created 18 fictitious identities to apply for premium subsidies through the federal Exchange by telephone, online and in-person.  With only one exception, GAO was able to get premium tax credits and health insurance with fake information through telephone and online applications.  The results of their investigation are as follows:

11 out of 12 Fake Applications Approved: Out of 12 applications with fake information for the Federal exchanges, 11 were approved.  The total amount of these credits was $2,500 per month or $30,000 per year and is currently being paid out for insurance policies for these fictitious individuals. 

Applications with Fake Documents of Citizenship and Income Approved: Investigators provided fake documents, such as Social Security Numbers and proof of income and citizenship, which proved to be no barrier to getting taxpayer-funded credits.  Additionally, investigators found that federal contractors made no effort to authenticate documents applicants provided. 

In-Person Assisters Nowhere to be Found: GAO made six in-person attempts to sign up for federal subsidies.  GAO was unable to obtain assistance in five of those attempts for a range of reasons including one navigator stating assistance was not available because HealthCare.gov was down and another declining to provide assistance.  These assisters have received tens of millions of dollars in federal grants to provide services to applicants. 

Senate Finance Committee Ranking Member Orrin Hatch: “Ironically, the GAO has found Obamacare is working really well – for those who don’t exist.  When the Administration deemed the conversation about Obamacare over after reaching enrollment targets, they were dead wrong.  These appalling findings not only question the validity of their numbers but show this poorly drafted law’s massive vulnerabilities to rampant waste and fraud.  From the outset, I have raised the alarm on the enormous fraud and abuse implications of this ill-conceived law.  Now the question is: Will this Administration finally own up to the taxpayer funded sinkhole this law has turned into and protect American families and taxpayers moving forward?” 

Chairman Camp: “We are seeing a trend with ObamaCare information systems: under every rock, there is incompetence, waste, and the potential for fraud. Last month, we found that the Administration was unable to verify income or eligibility for insurance subsidies.  Now, we learn that in many cases, the Exchange is unable to screen out fake identities or documents.  This law is already hitting Americans where it hurts the most – their pocketbooks.  Now, this Administration is forcing the American taxpayer to foot the bill for ObamaCare’s waste and fraud.” 

Oversight Subcommittee Chairman Boustany: “ObamaCare is a mess.  Its broken structure invites waste, fraud, and abuse that will cost the American taxpayer millions in subsidies to individuals whose eligibility the Administration won’t bother to verify.  No wonder hard-working Americans are fed up with a government that spends too much on broken programs that aren’t doing the job they’re intended to.  We can and must do better.”

Senate Committee on Homeland Security & Government Affairs Committee Ranking Member Tom Coburn: “GAO’s early results of its audit of Healthcare.gov are astounding.  Fictitious people have used fictitious documents to gain tens of thousands of dollars in real subsidies.  Yet, before subsidies were paid in January, the former secretary ‘certified’ the proper controls were in place to prevent these kinds of improper payments.  Given GAO’s evidence and the OIG’s findings earlier this month, we have seen consistent problems in how HHS has implemented Healthcare.gov.  Far from fictitious, this kind of incompetence and gross mismanagement is unacceptable and deeply troubling.  At a time when we’re facing a $17 trillion debt, it is imperative that DHS take the necessary steps to address the problems identified in GAO’s report. 

Background: According to GAO, nationally over 2.6 million application inconsistencies have been found for people who have selected health plans in the Exchange. 

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