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GAO Investigation Finds Obamacare Wide Open to Fraud

An undercover sting operation by the Government Accountability Office found that fake people can easily get access to insurance supported by real tax subsidies.

The GAO created 18 fake identities backed up by fake documents. The plan was for them to be split in groups of 6 and apply for Obamacare insurance online, over the phone and in person. The in-person sign ups were a bust because 5 of 6 "navigators" contacted by the investigators were unable to offer any help at all. One fake individual was correctly told they weren't eligible because their income was too high.

The investigator's remaining 12 attempts to get insurance were much more successful. The six attempts to apply online failed to pass an identity verification step, however investigators found they could simply complete those applications by phone.

In the end, 11 of the 12 fictitious people were able to sign up for a subsidized Obamacare health plan. Only one person was rejected after they failed to provide a Social Security number with their application. However the other 11 (including those who provided fake Social Security numbers) got through the system. According to NBC News, "two of the fake applicants were told their citizenship had been verified."

The total cost of subsidies for the 11 fictitious people was $2,500 a month or $30,000 a year. According to investigators, they had no trouble maintaining their tax subsidized coverage once it was established. That included three instances where the investigators never responded to requests for supporting documentation.

How could such obvious lapses in security be allowed to happen? GAO explains, "The contractor told us it does not seek to detect fraud and accepts documents as authentic unless there are obvious alterations."

Republicans were quick to denounce the preliminary GAO results. House Ways and Means Chairman Dave Camp said, "We are seeing a trend with ObamaCare information systems: under every rock, there is incompetence, waste, and the potential for fraud." Sen. Orrin Hatch quipped, "Ironically, the GAO has found Obamacare is working really well – for those who don’t exist."

In response to the GAO report, a spokesperson for HHS told NBC News, "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."


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