GAO: Easy To Obtain Obamacare With Fake ID

By Christine Kern, contributing writer

Government investigators obtain ObamaCare coverage and subsidies using fake identities.

An undercover investigation launched by the Government Accountability Office discovered it was easy to falsify information when applying for Premium Tax Credits to help pay for health insurance. In a preliminary report, the GAO said that it used investigators to create 18 fictitious identities to apply for premium subsidies through the federal health insurance exchange by telephone, online at HealthCare.gov and in-person.

In all but one case, the GAO investigators were able to obtain premium tax credits and health insurance with fraudulent information through telephone and online applications, according to a preliminary report requested by Republicans on the House Ways and Means Oversight Subcommittee.

The Patient Protection and Affordable Care Act requires the marketplace to provide eligibility while identified inconsistencies between information provided by the applicant and by government sources are being resolved through submission of supplementary documentation from the applicant. For its 11 approved applications, the GAO was directed to submit supporting documents, such as proof of income or citizenship; but the GAO found the document submission and review process to be inconsistent among these applications. As of July 2014, the GAO had received notification that portions of the fake documentation sent for two enrollees had been verified.

According to CMS, its document-processing contractor is not required to authenticate documentation; the contractor does not seek to detect fraud and accepts documents as authentic unless there are obvious alterations. As of July 2014, GAO continues to receive subsidized coverage for the 11 applications, including 3 applications where GAO did not provide any requested supporting documents.

Out of the 12 applications with false information for the federal exchanges, 11 were approved, the report noted. The total amount of credits was $2,500 per month or $30,000 per year and is currently being paid out for insurance policies for these fictitious individuals.

Investigators provided falsified documents, including Social Security Numbers and proof of income and citizenship, which did not hamper their efforts to obtain the taxpayer-funded credits. In addition, investigators found that federal contractors made no effort to authenticate documents applicants provided.

Among the findings:

• Contractors processing applications for the government told the GAO their role was not to ferret out potential fraud.
• Five of six bogus phone applications went through successfully. The one exception involved an applicant who refused to provide a Social Security number.
• Six online applications were snagged by an identity checking system. But investigators just dialed a call center and all six were approved. That seemed to be an open pathway to coverage.

“We are seeing a trend with Obamacare information systems: under every rock, there is incompetence, waste and the potential for fraud,” committee Chairman Dave Camp, a Michigan Republican told NBC News. “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.”

Seto Bagdoyan, acting director of audit services at the GAO’s Forensic Audits and Investigative Service, told lawmakers that the GAO report was not yet investigating the IRS’s role in the process of verifying the tax credits. The GAO report looked at the role of the Centers for Medicare & Medicaid Services.