- The Government Office of Accountability Wednesday morning presented to the House Ways and Means Committee the results of an undercover investigation into fraud and waste in the federal exchange marketplace. The inquiry used fictitious identities to apply for coverage and subsidies; Of the 12 false individuals, all but one were able to acquire and retain coverage.
- The fake individuals had missing or inaccurate Social Security numbers and invalid citizenship information. The undercover GAO investigators acquired health plans both online and by phone.
- Of the 5.4 million individuals signed up through the federal marketplace, the GAO says there are 2.6 million "inconsistencies" as of mid-July, only 650,000 of which have been resolved.
Tough week for ACA subsidies. This bombshell dropped in the wake of yesterday's Halbig decision, which determined that subsidies for federal marketplace plans are not legal.
Republicans have long contended that the government does not do enough to to verify the identity and eligibility of Healthcare.gov customers, opening the system to fraud and waste. Now, it appears their claims were correct: Six of the fake applicants used in-person assisters, and just one correctly identified that the investigator's income as too high for a subsidy. The Congressional Budget Office estimates the 2014 ACA costs at $36 billion for this year, with subsidies accounting for a big chunk of that, so don't expect this to go away any time soon.
The inquiry is also being conducted on the state level, but the GAO has not revealed which states are under investigation.
In a statement, a CMS spokesperson said:
"As the GAO notes in its interim report, the steps we take to ensure that individuals and families get the premium support and coverage they deserve, and that no one receives a benefit they shouldn't, are ongoing and have not concluded. While the Marketplace has several layers of safeguards in place to verify consumer data, including requiring consumers to submit accurate information to qualify for health coverage, we are examining this report carefully and will work with GAO to identify additional strategies to strengthen our verification processes."
Want to read more? You might enjoy this infographic about the battle for premium subsidies in the wake of the split court decisions yesterday.