O-Care subsidies remain top HHS challenge

The Department of Health and Human Services (HHS) is still struggling to ensure that ObamaCare subsidies are going to the right people at the right time, according to a government audit.

More than a year after the launch of the government’s healthcare exchanges, the timeliness and verification of payments remains a top concern, the inspector general of HHS wrote in a report.  

“Ensuring sound expenditure of taxpayer funds for intended purposes poses a substantial management challenge,” the report states.


Part of the problem is HHS’s reliance on manual systems. To improve the process, the report says the department must create more reliable financial management and payment systems.

Without safeguards to ensure correct payments, the system could put “substantial federal funds“ at risk, according to its 2014 Top Management & Performance Challenges report.

It also said HHS must coordinate with the Internal Revenue Service and state insurance marketplaces to make sure that the data used for the payments is timely and accurate.

The inspector general had already warned that there were issues with information checks before making payments. In a June report, it found data inconsistencies that made it impossible for the federal government to verify income and citizenship for millions of people.

Since then, Republican lawmakers have latched onto the failure to check eligibility as a key part of their attacks against ObamaCare.

The audit also raised questions about the department’s ability to process enrollments and re-enrollments, as well as the security of personal information.


HHS has made some progress in improving its management of ObamaCare, including an "interim process" for checking data and a stronger cybersecurity system.

When the healthcare exchanges opened last weekend, it also launched a new version of the embattled HealthCare.gov.

Health insurance marketplaces, in general, remain the biggest challenge for HHS for the third year in a row, according to annual reports from the auditor.

Other challenges in 2014 included proper use of Medicare and Medicaid, the quality of nursing home care, and the security of personal health information.