HealthCare.gov Re-enrolled Fraudulent Obamacare Accounts—and Gave Some of Them Bigger Subsidies

Government watchdog says Healthcare.gov has no fraud prevention system in place.



Here's how pathetically bad Obamacare's federal insurance exchange is at detecting fraud: 11 completely fake enrollees who were improperly granted subsidies last year in a damning and widely covered undercover investigation by the Government Accountability Office (GAO) were automatically re-enrolled again, according to an AP report. Some of them even got higher subsidies this year.

The system, in other words, allowed the fraud to happen—and then, even after the undercover op was revealed, mindlessly repeated the fraud again the following year.

The government watchdog reported last summer that it had created a dozen fraudulent accounts using fake names and made-up Social Security numbers. It was an undercover sting, but it didn't rely on any particularly clever scheme; GAO employees simply called in or got online and went through the normal application process using made-up information. Of the 12 attempts, 11 made it through the process. When the GAO released its report in July, 2014, the subsidies were still being issued.

They never got cut off. In fact, all 11 fraudulent accounts were re-enrolled by the system, according to an Associated Press report.

The AP obtained early access to a new GAO report and testimony scheduled for tomorrow, and reports that of those 11, six were "flagged and sent termination notices." But five of the six terminated accounts were reinstated after GAO officials pulled the nefarious and daring trick of…calling to ask for them to be reinstated (the sixth remains under review). The five reinstated accounts, the AP reports, "even got their monthly subsidies bumped up a bit, although GAO did not ask for it."

It is worth remembering that this is in direct contradiction of a promise made by the Obama administration that a working verification system was in place when Obamacare's big coverage provisions went into effect.

On January 1, 2014, the day that Obamacare's major coverage expansion provisions kicked in, former Health and Human Services Secretary Kathleen Sebelius sent a letter to President Obama formally certifying that Obamacare's health insurance exchanges "verify that applicants for advance payments of the premium tax credit and cost-sharing reductions are eligible for such payments and reductions" as required by the law. "When a consumer applies for insurance affordability programs, including advance payments of the premium tax credit and cost-sharing reductions, the Marketplace [the exchanges] verifies application information provided by the consumer," the letter stated.

Right. So that didn't happen at all.

It wasn't true last year, when Kathleen Sebelius certified that it was true, and it's clearly not true now, when the GAO's not-exactly-secret bogus accounts not only remain on the books but have been automatically reenrolled by a system that obviously makes little attempt to weed out fake accounts, even when the existence of those fake accounts has been revealed in a GAO report, a congressional hearing, and multiple major news articles.

After news of last year's GAO report, the administration said that "they were trying to address the problems," The New York Times reported. Judging by the GAO's latest, if any effort was made to correct these issues, it obviously wasn't very successful.

But it's not clear that any effort was made at all. "HealthCare.gov does not appear to be set up to detect fraud," according to the AP, which reports that GAO audits and investigations chief Seto Bagdoyan will say in congressional testimony that "HealthCare.gov's document-processing contractor "is not required to seek to detect fraud," and that "the contractor personnel involved in the document-verification process are not trained as fraud experts and do not perform antifraud duties."

It's not that the system doesn't work. It's that there's no system, period

This story tells you a lot about the shabby state of Obamacare, as well as the federal government's generally underwhelming efforts to prevent fraud in its major health care programs.

It also tells you how much the administration's word is worth when it comes to oversight of Obamacare. A senior administration official certified that a working subsidy eligibility verification system was in place when it obviously wasn't. Months later the administration said it would fix problems that a nonpartisan government investigation had revealed. A full year later, it's still very broken. Whether administration officials are intentionally lying or merely incompetent doesn't much matter; the point is that you can't trust them either way. 

NEXT: Obama Defends Iran Deal, Donald Trump Says He's Worth $10 Billion, Clashes Break Out in Greece: P.M. Links

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  1. Fraud prevention in a fraudulent scheme? This is a novel concept. Tell me more.

  2. Fraud does not exist. Not in the ACA, welfare, food stamps, or voting. Unless, of course, a Rethuglican manages to get elected.

    1. Racist.

    2. I’m increasingly convinced that fraud is the whole point, at the top, for service providers, and for recipients.

      1. How the fuck anybody could believe that fraud isn’t rampant in government, an institution where:

        1. merit is practically meaningless
        2. all money is other people’s
        3. every fuckup is rivaled only by the coverup that follows
        4. the goal of every agency is to expand the scope of its own mission
        5. “I take full responsibility” is a punch line

        is beyond me.

        1. Herbert Spencer had the same idea. In one of his books (I forget which one at the moment, but I’m thinking it was Man vs. the State) he pointed out that people assume that all of the innerworkings of the government are fine UNTIL they see proof that something rotten was going on. He states that you’d actually be correct more often if you simply assumed that everything behind the scenes was totally corrupt until it was proven otherwise.

      2. There is a reason groups like ACORN existed.

  3. Frog protection?

    1. I can’t possibly see what the French stand to gain by this.

      1. French benefits.

  4. The fix? Make enrollees remove their shoes and not enroll with liquid totaling more than 3.4 ounces.

    1. You, Sir/Madam, just won the Internet!

  5. “This is working exactly as intended” – Chief Justice Roberts

    1. That reminds me of that cloaked guy in that Dune ripoff movie.

  6. “It is worth remembering that this is in direct contradiction of a promise made by the Obama administration that a working verification system was in place when Obamacare’s big coverage provisions went into effect.”

    It’s almost as if the government is lying to us.

  7. It reminds me of the Obama campaign’s online fund-raising where they never turned on the software that prevents fraud.

    1. Hey, those campaign contributions from Iran were important!

      1. I think it was either John rotten or dick van fucking patton, who said it best … something about cheating.

  8. I’ve been trying to buy a policy through the exchange since May without success. Should I do something improper just to grease the wheels a little bit?

    1. Maybe your SSN is one of the ones the GAO used and that’s why you’re getting denied…

      1. I would love a denial. Anything to show that somebody is working on something would be appreciated at this point.

  9. I ththink it was on here that I saw someone propose we give the progs a parellel legislature.

    It would have elections. Their offices would get budgets for staff and so on. It would have all the pomp and circumstance of a legislature. They could hold press conferences.

    The only difference between it and a real legislature is that nothing they passed would go into effect. So they could raise taxes on the rich, but taxes wouldn’t go up. They could pass gun control, but no guns would be controlled.

    It would, however, let progs do something. And, when it didn’t work, they could blame it on the unenlightened people who work in the other legislature.

    This seems like the best way to contain the progs

    1. France does this for the unemployed. They actually set up fake companies where you go to work doing fantasy work.

      I think its a great idea.

  10. An undercover sting? That didn’t target anyone?

    1. A bold ploy to get their own SWAT vehicle and a few hundred thousand rounds of something nice for Christmas. Why should the Social Security Administration and the Postal Service get all the love?

  11. In order to detect fraud, O-care needs it’s own inspector general. Now those IG personnel will have full federal law enforcement powers so they’ll need cars with flashing lights on them and badges (see SIGTARP). And of course, guns (like the one left by the BLM ranger in its car). The IG will almost certainly need a SWAT team for those dangerous fraud cases too.

    1. Plus a gun range, obstacle course, and several million rounds of ammo.

  12. “In two years of operation, only 11 fraudulent accounts have been detected!” HealthCare.gov, probably.

    1. It explains why I no longer get 419 fraud emails…

      1. A few days ago I read about the man who sold the Eiffel Tower… twice. We’ve really been shortchanged for good con artists lately.

        1. What about Neal Caffrey?

  13. Should I be worried about how the government is handling technology and information?

    We’re getting hacked left and right and the website that collect sensitive information is apparently still glitchy.

    Donald Trump made more noise than the Chinese hacking.

  14. The really crazy thing is that I personally tried 109 times to set up an ObamaCare account and get coverage at healthcare.gove before giving up and just buying it directly from Blue Cross. I even copied and mailed documents to HHS to accomplish resolution, but I got no reply. I make too much to get a subsidy, so it’s not a big deal.

    The ObamaCare exchanges are an utter failure in my experience. And I’m sure that all the data that I submitted have been compromised as well. I have never encountered anything as bad on the Internet.

    1. Fraud may not be detected, but people on the wrongthink list probably are.

  15. This is the only kind of news we are ever going to get from this stinking pile of shit. A steady stream of these stories year after year after year.

    I don’t know why Obumbles thinks he needs another legacy. It is hard to see how he can top that one, though he may have done it with the Iran deal.

    1. The fun part is watching progs tell themselves in their echo chambers what a smashing success it is. I mean, I know a bunch of people who have had to adjust to it and gotten screwed by it, and not one real person who has benefited, but it’s a success! The polls prove it!

  16. Ium frum duh gubmint an hear two hylp

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