Fun with fraud: Government watchdog duped Obamacare 96 percent of the time

As I write this piece, two Obama administration officials are taking a bruising from House Republicans over the Affordable Care Act (ACA). The reason: Anti-fraud controls in the ACA are about as effective as a sieve.

According to the Government Accountability Office (GAO), in three years of testing the ACA’s protections against fraud, its efforts to get around the systems were successful 96 percent of the time.

The head investigator, who is also testifying to Congress this morning, was quite clear in an interview with me yesterday:

“I think the point I’ve made in the past is that these are significant vulnerabilities in the process itself, and the checks and controls,” Seto Bagdoyan […] explained. “We were able to overcome them, using the system’s own instructions.”

One set of instructions told GAO’s investigators to contact a representative by phone to gain insurance coverage. According to Bagdoyan, “We were able to talk our way into getting coverage and subsidies by engaging in a conversation with a representative on the other end of the phone. And this was consistent, year on year on year.”

The systems in exchanges across the country – including ones that are state-run and federally-run – were so incompetent that even using fake Social Security numbers didn’t deter fraudulent coverage:

In 2015, “fictitious applications for subsidized health plans” were used 10 times, according to the GAO report for that year. Medicaid coverage was approved in seven out of eight fake applications. Four states – New Jersey, North Dakota, California, and Kentucky – were targeted.

The 2016 investigation included four applications out of the eight submitted that were follow-ups from prior years. West Virginia and Virginia federal-run exchanges failed in this examination, as did California’s state-run exchange.

The most recent investigation included applications that included non-existent Social Security numbers. One included a fake immigration card, and in four cases GAO investigators gained subsidized health insurance by falsely claiming they were turned down for Medicaid coverage.

Speaking of Medicaid coverage, conservatives have been warning for years that expansion would likely increase the tax dollars lost to incompetence and fraud. More than $136 billion was lost across the federal government to improper payments in 2015 alone, with Medicaid responsible for about $29 billion.

Of course, a hearing less than two months before an election, and just a couple of weeks before our esteemed public officials go back to campaigning, won’t actually lead to substantive changes anytime soon. Despite tens of billions of dollars lost to various inefficiencies in federal health care programs, Congress earlier this year was only able to push a bill that saves…$2.8 million per year.

The GAO reported that a number of officials at the state and federal levels agreed to fix some of the problems, which is good, but the real change needed is to scrap and replace the ACA in its entirety, and make major changes to both Medicare and Medicaid.

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Dustin Siggins

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