Gaping Holes in ACA Verification Leave Unsolved Problems

HOLES IN ACA VERIFICATION MBAA © 2014

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Gaping Holes in ACA Verification Leave Unsolved Problems


"The rollout of Obamacare has produced some t remendous growing pains in the United States. This is true not only for those implementing the new law, but also for the consumers, the insurance companies, and even the medical professionals. "A new growing pain of sorts has reared its head, proving that the program sti l l has large-scale wrinkles to be ironed out. "The Department of Health and Human Services submitted a report on the systems that were put in place to prevent applicants from using inaccurate information (mistakenly or intentionally) to receive health insurance or subsidies. "The audit indicates that there is a gaping hole in the system, and this has shed a bright light on the issues that marketplaces are having rectifying certain inconsistencies that have been reported. This only reignites any arguments that may have been forgotten regarding the entire system’s functionality.

"The Office of the Inspector General (OIG) analyzed exchanges that included Covered California, Healthcare.gov and Access Health CT (Connecticut’s exchange). From each marketplace, 45 random applications that were already determined to be eligible were inspected. None of the three exchanges were effective in ensuring an applicant’s eligibility for an insurance plan by confirming the information given. "In the 45 random cases reviewed in California, seven of them were not verified for citizenship through the Department of Homeland Security when their social security number was listed as

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Millions of Obamacare Application Discrepancies Remain Unresolved

The Report


not belonging to a United States citizen. Also, 30 of the 45 applications had contradictory information, and 19 of those were left unresolved. "Inspector General at HHS, Daniel Levinson, said, “The deficiencies in internal controls that we identified may have limited the marketplace’s ability to prevent the use of inaccurate or fraudulent information when determining eligibility of applicants for enrollment.”

In fact, nearly three million “inconsistencies” (meaning information that was given on an application did not match the records that the government had) remain unresolved. "These issues were to be taken care of months ago to ensure, among many other things, that those applicants who did not qualify for subsidies or a health insurance plan did not receive them. "The audit stated that “The Federal marketplace was not able to resolve inconsistencies related to: citizenship, status as a national, lawful presence, residency, family size, annual household income, and whether the applicant was eligible for minimum essential coverage through employer-sponsored insurance.”

"“The deficiencies in internal controls that we identified may have limited the marketplaces’ ability to prevent the use of inaccurate or fraudulent information when determining eligibility of applicants for enrollment in qualified health plans,” said the OIG. "The majority of the issues concern either income or citizenship status, which are both large factors in qualifying for Obamacare and its subsidies. Only citizens can apply for and receive Obamacare, and only those whose income falls within a certain category qualify for subsidies and tax credit assistance. A discouraging 77 percent of the applications with inconsistencies

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The Biggest Issues

The deficiencies in internal controls that we identified may have limited the marketplace’s ability to prevent the use of inaccurate or fraudulent information when determining eligibility of applicants for enrollment

- Daniel Levinson, HHS

“


contained informat ion that differed from what federal records show in either income or citizenship status. "F o l l o w i n g c l o s e l y b e h i n d citizenship and income are other factors which can affect eligibility for both insurance and the subsidies to help pay for it. Those f ac to r s a re Na t i ve American status, social security number, employer-sponsored m i n i m u m c o v e r a g e , n o n -employer sponsored minimum coverage, and incarceration status. "

Some other issues noted, however, have been ridiculous at best. One marketplace reported children being “erroneously identified as incarcerated.” With such a wide range of inaccuracies, a system that is less than fully capable of detecting and preventing inaccurate levels of coverage or payment assistance, can be extremely costly to taxpayers as well as the insured.

"According to the audit, “…as of Feb. 23, 2014, the Federal marketplace had resolved approximately 10,000 of the 2.9 million inconsistencies (less than 1 percent).” Now, after nine months of effort, 85 percent of these discrepancies remain undone. Out of the three million issues reported, only 425,000 have been fixed. "In the federal exchange, there was an application where the social security number was left blank and the applicant was still deemed eligible. "The audit also noted that the exchanges trusted the applicants’ word regarding their identity and citizenship rather than going through a confirmation process. "Reportedly, there is no requirement for any other verification beyond the applicants’ word; however, this information did not sit well with many who already have a sore spot for Obamacare. "

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…as of Feb. 23, 2014, the Federal marketplace had resolved approximately 10,000 of the 2.9 million inconsistencies (less than 1 percent).“


Senator Jerry Moran said, “Once again, we are provided further evidence that Obamacare is not working. In fact, the administration is relying on nothing more than the honor system to run a billion-dollar program.” "The report went on to note that, since the federal marketplace lacks the ability to correct the majority of the inconsistencies, there is no way they can guarantee that the applicants meet the necessary requirements to enroll in any of the insurance plans or receive subsidies. "

"Some application issues were actually expected due to mistakes while filling out the application or because of applicants p u r p o s e l y r e p o r t i n g i n a c c u r a t e information so that they would qualify for a benefit that they wouldn’t otherwise receive. The numbers reaching three million were definitely not expected. "It was also reported that some of the marketplaces did not reach out to the applicants and notify them of any issue with their application. "A three-month time frame was forecasted to get the data caught up and reconciled.

The process, however, was delayed due to some technical problems, according to the Department of Health and Human Services Office of Inspector General. "The Centers for Medicare and Medicaid Services (CMS) said that they are “committed to verifying the eligibility of consumers who apply for enrollment in qualified plans.” They have also stated that this overwhelming number of inaccurate information will not put anyone’s health insurance at risk. "CMS reportedly contacts those with inconsistencies on their application many times and through multiple avenues. “We are actively reaching out to consumers to provide additional information that supports their application for coverage and verifying their information every day.” "They do not consider the residency verification practices to be an issue that actually need reporting. They also stated that the requirements of the federal government were adhered to and that there really were no complete, reliable sources to verify residency. "

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What the Government is Saying


It was also reported that often inconsistencies aren’t of such a h i g h c a l i b e r t h a t t h e y w i l l completely disqualify an applicant. It’s quite possible that if a child is adopted one year, federal records may show a different family size from the previous year. "It is also possible that a layoff or pay cut may cause a current i n c o m e n o t t o m a t c h t h e information that the IRS has based on a comparison of the prior year’s return. "Not everyone feels this way. Rep. Diane Black said, “This report confirms what many of us already knew – that despite repeated reassurance from this administration, the systems were not in place to determine income eligibility for Obamacare subsidies when this law was implemented.” "She went on to say that “This outrageous mismanagement of taxpayer dollars will likely lead to billions of dollars in waste and abuse, all because this administration moved forward with implementation despite repeated warnings that the systems were not ready.” "The CMS is busy working to handle the inconsistencies and ensure that applicants and their dependents get what they should from Obamacare – not more and not less because of a data error. For those who are receiving subsidies and health insurance that actually do not qualify, a loss of insurance and/or subsidies is quite possible.

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