Why You Shouldn't Trust the Administration When It Says It Will Fix Obamacare

Ongoing fraud vulnerabilities reveal the administration's inability to address the health law's persistent problems.



As Obamacare's struggles have become more apparent in recent weeks and months, the administration has taken an increasingly defensive tone about the law.

Following news that major health insurers were scaling back their participation in the law's exchanges, President Obama met with insurers and thanked them for sticking with the law, noting in a letter that the exchange business had "growing pains and opportunities for improvement." Responding to widespread reports that premiums are set to spike for coverage bought in the health law's exchanges, Health and Human Services (HHS) Sec. Sylvia Burwell delicately wrote in a CNN op-ed that the administration does "expect 2017 to be a transition year for the Marketplace"—an implicit admission that premiums would rise substantially—but also promised that officials were working to improve the law, and suggested that the transition (i.e. premium spikes) would only be a temporary, one-time occurence. The Centers for Medicare and Medicaid Services (CMS) made an unusual early release of proposed regulations designed to quell some insurer complaints about the law.

The administration's intended message from all of this activity is clear enough: Yes, there's some turbulence, but much of it is temporary, and we're working to resolve any problems it might have.

These promises ring almost entirely hollow, because the administration has a long history of downplaying problems with the law, and promising fixes that never arrive.

Indeed, if you want to understand why you shouldn't trust the Obama administration when it says it plans to fix Obamacare's problems, just look at the latest Government Accountability Office report on the law's vulnerability to fraud.

The government watchdog released a report this week warning that Obamacare is vulnerable to fraud. In an undercover operation, agency submitted fake applications for coverage during 2015 and 2016, almost all of which were successful in obtaining subsidies, although in some cases the initial applications were initially rejected. Notably, four of the 2015 applications used Social Security numbers that have never been issues, and four of the 2016 applications used fake application information that had been approved in 2014—but did not come with tax-return data that is now supposed to be required for applicants who previously received a subsidy. All of those applications were approved. The entire damning GAO report, which delves into the details of the operation and its results, is worth reading in full.

The news here is not that Obamacare's exchanges are not confirming the eligibility of applicants and are thus vulnerable to fraud. The news is that Obamacare's exchanges are still not confirming the eligibility of applicants and are thus vulnerable to fraud—despite years of warning from multiple government watchdogs that this was a problem, and years of promises from the Obama administration that these issues would be resolved.

As early as September of 2013—before the law's exchanges even went online—the Internal Revenue Service Inspector General could be found sounding the alarm that the tax agency was unprepared to combat fraud in the exchanges, warning that "a fraud mitigation strategy is not in place to guide Affordable Care Act systems development, testing, initial deployment, and long-term operations."

The GAO, meanwhile, has been running undercover operations testing the law's effectiveness at verifying eligibility for subsidies for years. This isn't the first time the agency has noted the law's vulnerability to fraud, or even the second. It is at least the fourth time the agency has issued such a warning.

The first came in July of 2014, in the form of congressional testimony reporting that GAO investigators had successfully applied for subsidies using false information. The following summer, the GAO once again released the results of undercover testing, showing that not only were 11 of its initial counterfeit applications re-enrolled for a second year, some of them received even larger subsidies the second time around. In February of this year, the GAO released another report finding that the CMS, the government agency that administers the health care law, relied on a document processing company to report instances of fraud—even though CMS "does not require the contractor to have any fraud detection capabilities." The government had "assumed a passive approach to identifying and preventing fraud," the GAO said at the time.

Throughout all of this, the Obama administration has always promised that it would work to resolve the problem. We "will work with GAO to identify additional strategies to strengthen our verification processes during this first year of the Affordable Care Act," a CMS spokesperson said in response to the July 2014 testimony. "With regard to the issue of making sure the right people are getting any taxpayer subsidy, we take it very seriously," Health and Human Services Sec. Sylvia Burwell said in February, when the GAO labeled administration fraud prevention efforts "passive."

The consistency of the GAO's reports over the last several years suggests that the administration does not take the issue very seriously at all. It's not clear the administration ever did. Its initial position was that fraud would not be a problem, because an adequate verification system was already in place. On January 1, 2014, the first day in which coverage bought under the law became active, then-HHS Sec. Kathleen Sebelius submitted a letter personally certifying that the exchanges "have implemented numerous systems and processes to carry out these verifications" and would "[verify] application information provided by the consumer when making an eligibility determination."

That was more than two and a half years ago. It's clear now that either some of those systems were never put in place at all, or that the verification systems that have been implemented do not fully work (or both). As for Sebelius, either she did not know that the verification systems were inadequate, or she did know, but said otherwise.

This is not a one-time story. It is illustrative of the administration's approach to the law's failures. The Obama administration has continued to tout the promise of the health law's Accountable Care Organizations to reform the delivery of health care even as half of its model hospital systems have dropped out of the program. The ACO drop-outs include Dartmouth College, which helped devise the idea. Administration officials said they were looking into options to address the financial struggles of the non-profit insurers created using government backed loans under the law, but the co-ops have continued to struggle and fail. Now just seven of the original 23 remain active. The administration has attempted to reassure the public that premiums would remain relatively affordable this year, despite evidence that premiums will rise even for those who shop carefully and are willing to switch plans.

Over and over again, the administration has promised that the law will not fail, that it is not failing, that any problems are not as bad as they seem, or that fixes are on the way. Instead, the law's problems have persisted or grown worse. There's little reason to trust that the administration's latest round of reassurances will result in anything different.

NEXT: Comparing the Apology Styles of Gary Johnson, Clinton, and Trump

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  1. Obama has nothing whereas I have a final solution for it.

    1. You know who else….never mind.

      1. I’m amazed the handle wasn’t already taken or else banned altogether.

      2. David Hasselhoff?

    2. Your last final solution didn’t work out too well, fuhrer.

      1. I’ve mellowed as I’ve aged and allowed myself to be cyborgized, so I will let this pass. I even allow untermensch to serve me my morning coffee now. These days I mostly reserve my anger for more important things. But to those who think that I have failed, I can only laugh to myself. My secret weapon has already been deployed and I must but wait.

        1. Look, I don’t need any more reasons to hate Taylor Swift. Her terrible music and stupid face are enough.

          1. What, are you some kind of homosexual?

            1. That’s a man, baby!

              1. No, you’re thinking of Carrie Underwood. I mean, how can someone with a name like that not be born male?

            2. No, but why should that matter? Have you forgotten your misspent youth as a gay escort?

              She looks like Zsa Zsa Gabor after a couple of rounds of plastic surgery. I’ll pass.

              1. You are worse than Hitler.

                1. You are human garbage not even worth the cost it would take to sterilize you. Luckily, I’m pretty sure such excrement as yourself is the result of some sort chromosomal disorder that would prevent breeding.

                  1. My baby daughter is healthy and adorable. Your concern is appreciated.

    3. So, Trump or Clinton?

      1. Hillary is the sort of scheming, self-interested and ambitious go-getter that I always looked for. I’m with her.

        1. Trump is more like Mussolini. He’ll wait til Hillary has been in office a few days, then declare war on French Fries.

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  2. I agree that it is collapsing from the weight of its internal contradictions.

    Whoops, meant for Campus PC Movement Dying post!

    Hold on, maybe it applies here too…

    1. The problem is that nothing in succeeds in government quite like failure.

  3. When they are finished fixing it, its going to look like the British NHS, only with a lot more fiefdoms and cream-skimming, because that’s the American way.

    1. Look, it’s our job to shittily reimplement every foreign scheme that leftists like, and never to acknowledge that our existing ideas have any merit or should be changed only after careful consideration, and certainly never to wonder why, if every other country is doing things so great, people don’t move there instead.

      1. Embrace the change, yokel.

    2. Indeed. The ability to do so is already there.

      The real juice is the funding. To pay for these schemes, the 1332 waivers let states pocket the aggregate subsidies?including premium tax credits, cost-sharing subsidies, and small-business tax credits?that they would otherwise receive under ObamaCare. This federal slush fund could give states billions of dollars annually to subsidize their own publicly run health plan.

      The process gives the executive branch broad authority to coax or even coerce states to pursue the creation of these public options?without congressional consent. ObamaCare requires that any new scheme be “deficit neutral” relative to the cost of the law. So long as the new public option won’t add to ObamaCare’s costs, the state can use the law’s subsidies to pay for government-run plans. The waivers give states ample ability to use savings claimed by setting price controls on medical care as a way to meet the budget goals.

  4. Really, this is something that is up for discussion? The headline should read:

    Someone remind me why it’s ever a good idea to trust someone who created a mess to then fix it?

    1. Because:

      1) Intentions
      2) Top men
      3) To propose repeal isn’t a “real plan”. Only proposing a slightly watered down version of this steaming turd is a “real alternative”. In other words, watery runny shit is the only serious alternative to a sticky, steamy shit.
      4) Why do you hate poor people?

  5. I fail to see what this has to do with issues that matter, like Pepe the Frog.

    1. Maybe Hillary can get her many debilitating illnesses treated through Obmamacare.

      1. Republicans won’t let her. Koch brothers, global warming, blah blah yada yada blah blah…

        1. You would think she would at least get VA care after dodging sniper bullets in Sarajevo.

          1. I’m visualizing Hillary running serpentine across the tarmac.

  6. Wow! Sure am glad I read this post – I was this close to trusting the government to fix something. I mean, it’s natural to suspect them of not being able to fix something small and inconsequential, but ginormous horribly complicated and ungodly expensive issues? Heck, it takes government to even create a problem that big, who else besides government you gona trust to fix it? You think some sort of invisible hand is just going to show up and nudge people to voluntarily move in the right direction? Don’t make me laugh.

  7. Wow, daily pot use might actually make you thinner?

    1. “People who smoke marijuana daily may be slimmer than those who don’t use the drug, a new study suggests.”

      Medical experts already were aware of the health benefits of daily weed-smoking. Dr. Dre, for example.

    2. Aren’t pot users more likely to smoke cigarettes?

    3. Wow, daily pot use might actually make you thinner?

      Heeeeeyyyyyyyyyeeeeeyyyyyyyyyyyyyy…….. ……………………… …………..

      …. smoke weed everyday.

  8. Any law that requires a specific (and major) technology platform to succeed is a bad law. Technocratic fixes to problems lock laws into technology visions. It’s just an example of how over-lawed we are right now. But there was no way to accomplish what ACA’s creators wanted without a technology solution. So we end up with unworkable law.

    1. Ditto with any law which can only work if people act against their best interest.
      The New Soviet Man does not and did not exist.

      1. People are smart enough to voluntarily do what it pays them to do. Therefore, if the government is subsidizing something, rest assured it’s paying you to do something stupid.

  9. “Sylvia Burwell delicately wrote in a CNN op-ed that the administration does “expect 2017 to be a transition year for the Marketplace”

    So the ACA is transitioning? We all know it’s headed for the toilet, now we just have to fight over which one it can use.

    1. +1 Brave and Stunning!

  10. An excellent reason to vote for Trump is that if Hillary is in the White House when the music stops playing, she won’t sign anything that isn’t single payer–and the Republicans won’t have the numbers to override her veto.

    Trump isn’t about to initiate a paradise of free market healthcare either, but if Congress passes something better than what we have now, Trump won’t trash it and demand single payer instead.

  11. I’m just reading the article now, but I’m struck by the general theme… My #1 question:

    How can the Obama administration legally FIX ANYTHING in Obamacare? It’s a law, does the administration have the right to unilaterally change a law?

    1. Read all about it late on Friday before a holiday weekend.

    2. does the administration have the right to unilaterally change a law?

      I think that horse has long since left the barn.

    3. Ha ha, stop obsessing over a racist 100-year-old parchment.

    4. I think it’s one of those deals where the law gives regulators the authority to make thousands of pages of rules in order to implement the law. The regulations could theoretically be fixed, but they won’t. The solution to bad rules is always more bad rules. Removing bad rules just isn’t an option. More, more, more is always the answer.

    5. Did you read the last SCOTUS Obamacare decision?

      The executive is empowered to make policy work, it does not matter what the law actually says. The Court has effectively removed the legislative power from Congress as the law means what the executive needs it to mean.

      1. Will President Trump also have a pen and a phone, or will Obama take those with him when he leaves?

        1. Well yes. That is one reason why they are terrified of him. They know what they created.

      2. The Court has effectively removed the legislative power from Congress

        Not quite. Congress can still “override” the President by amending or repealing the law. But now the Executive can be “flexible” where Congress is unable or unwilling to clarify. Apparently, it’s more important that the government “works” (for some arbitrary definition of the word) than that it adheres to its own rules. I’m sure that’s going to have no negative consequences, no sirree.

        1. Note that the law did not actually need clarification. The wording was plain and unambiguous. It’s just that it was inconvenient for the stated purpose of the law. So that magically made it subject to the President’s whims.

          1. Yes, that is the part that concerns me about the balance if powers between the branches. The administration should have been bound by the law and have no discretion in that aspect without a correction in the language from.Congress.

        2. The English Crown still officially has a few powers to influence the government, but they are not meaningful or likely to be used. I think we are developing A Congress with the same issue.

  12. Explosive:

    The state Department of Banking and Insurance ordered Health Republic Insurance of New Jersey to stop offering plans in 2017, meaning consumers will only have two insurers to choose from on New Jersey’s individual health insurance marketplace next year.
    Health Republic lost nearly $59 million in the first six months of the year, leaving the insurer “insolvent” and in “hazardous financial condition,” commissioner Richard Badolato said.

    74% of the co-ops have gone belly up. Seventy four percent. Seven…four percent.

    Nothing to see here.

    Even I am surprised how fast Obamacare is crumbling. And I’m a dyed-in-the-wool hater.

    1. Someday soon, we may be citing the 26% that aren’t insolvent as evidence that they don’t really need to go single payer.

  13. In February of this year, the GAO released another report finding that the CMS, the government agency that administers the health care law, relied on a document processing company to report instances of fraud?even though CMS “does not require the contractor to have any fraud detection capabilities.”

    Ugh. Private contractors are the worst. I assume some Obama crony received the contract, too, therefore confirming my suspicion that capitalism is to blame for all the world’s ills.

    1. This ACA is awful.

      Yeah, and such small portions!

  14. Hey does anyone think that Republicans gave Hillary cancer or something, like they did with Chavez? I mean, why is no one talking about this?

    1. Because that would require a shocking level of competence by the Republicans. If they could actually pull that off, the only news sites covering Trump would be E! and the National Enquirer.

    2. They did it to Johnny Cochran, too. So they’re definitely capable.

    3. Well, there are definitely parts of the government that could dick around in other countries’ political affairs and murder leaders via cancer. And it’s possible that some people in those parts of the government object to Hillary’s treatment of classified information or her neglect of their the CIA’s personnel in Libya.

    4. The NFL concussion doctor who was played by Will Smith in the film has speculated that either Putin or Trump is poisoning Hillary, who has had a Secret Service detail since 1992.

      1. Really?

        Has someone been hitting him in the head?

    5. “…I mean, why is no one talking about this?”

      Jim Garrison wants to know!

  15. I can fix that headline with one line and one colon.

    Why You Shouldn’t Trust the Administration: When It Says It Will Fix Obamacare

  16. Fraud is endemic in every government program, and the more money involved, the amount of fraud increases. obama care is just beginning and is already rife with fraud. the government never even really tries to seriously eliminate the fraud.If government employees are complicit they rarely get fired and often get promoted )(note the VA scandal). Congress is totally impotent when it comes to controlling corruption, they can not even protect whistle blowers. These things are better handled by the private sector and i will provide a typical example. Recently Wells Fargo fired thousands of employees involved in a massive fraud. The customers were made whole, the damage was limited to the stockholders who accept the risks involved. The high level corporation official who designed the flawed program walked away with a multi-million retirement package but that was paid for by the stockholders also, not the general public. Every politician that promises a government program that is currently being done by the private sector is a liar, a thief and most likely a sex pervert. You can be sure he or she is trying to screw you.

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