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GAO Slams Further Obamacare Verification Lapses

by Scott Hamilton, Tax-News.com, Washington

13 September 2016


Undercover testing by the US Government Accountability Office (GAO) has found that the health insurance marketplaces set up under the Affordable Care Act (ACA) remain "vulnerable to fraud."

It said they may still grant access to individuals who are ineligible to enroll in qualified health plans and receive the premium tax credit (PTC).

The ACA's refundable PTC assists eligible taxpayers with paying their health insurance premiums. Individuals may elect to receive the tax credit as a lump sum credit on their annual federal income tax return, or to have the credit paid directly to their health insurance provider during a year as partial payment for their monthly premiums.

GAO noted that the ACA requires health-insurance marketplaces to verify application information to determine eligibility for enrollment and, if applicable, determine eligibility for the income-based PTC. Verification steps include validating the applicant's Social Security number, if one is provided; citizenship or immigration status; and household income.

It added that the 2016 coverage year, which ran from November 1, 2015, to January 31, 2016, "was the first year in which a key eligibility requirement – verification of whether applicants who previously received [the PTC] filed federal tax returns, as a requirement to retain that benefit – went into effect."

GAO was asked to review this year's marketplace enrollment and verification controls. Its review related, in particular, to perceived failings in marketplace controls over whether health insurance applicants had made the required income-tax filings, and on applicants' identity or citizenship/immigration status. It made 15 fictitious applications in Virginia, West Virginia, and California, and the marketplaces initially approved health coverage and PTCs (where applicable) for all of them.

Reacting to GAO's report, House of Representatives Ways and Means Committee Chairman Kevin Brady (R – Texas) said that "the fact that the exchanges are so susceptible to fraud is just further proof that the President's health care law is not working as promised – and wasting billions of taxpayer dollars in the process."

Senate Finance Committee Chairman Orrin Hatch (R – Utah) added that "the Obama Administration continues to fail the test when it comes to enrollment verification. … That the Administration has been aware of this since 2014, and has failed to employ proper safeguards, is just the latest incompetence in the health law's implementation."

TAGS: individuals | compliance | tax | tax compliance | law | insurance | tax credits | health care | legislation | United States

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