Investigation exposes holes in ObamaCare sign-up system

An initial undercover investigation examined ways to use fake information online and over the phone to get health insurance and tax subsidies through the federal healthcare exchange.

The Government Accountability Office (GAO) created 12 identities with fake citizenship and immigration statuses as well as fake income documents to test how easy it is to get insurance coverage and qualify for tax credits.

GAO said 11 of the fake applicants were accepted and only one of them denied because they did not list a social security number.


“For its 11 approved applications, GAO was directed to submit supporting documents, such as proof of income or citizenship; but, GAO found the document submission and review process to be inconsistent among these applications,” the agency said. “As of July 2014, GAO had received notification that portions of the fake documentation sent for two enrollees had been verified.”

GAO said the contractor hired to process the insurance applications isn't required to authenticate the application.

“The contractor told us it does not seek to detect fraud and accepts documents as authentic unless there are obvious alterations,” said the agency. “As of July 2014, GAO continues to receive subsidized coverage for the 11 applications, including 3 applications where GAO did not provide any requested supporting documents.”

The GAO report was released by Republicans ahead of a Wednesday House Ways and Means Committee hearing where lawmakers will debate the government’s ability to verify insurance applications to qualify consumers for premium tax credits.

“We are seeing a trend with ObamaCare information systems: under every rock, there is incompetence, waste, and the potential for fraud,” said committee Chairman David Camp (R-Mich.).

The Obama administration has admitted it has had problems with its verification system but insists it is improving the system and following up with consumers with inconsistent information.


Republicans have held several hearings on the matter and have called on all subsidies to be suspended until the verification system can be fixed. The GAO's new report will only fan the flames.

“Ironically, the GAO has found Obamacare is working really well – for those who don’t exist,” said Senate Finance Committee Ranking Member Orrin HatchOrrin Grant HatchDrug prices are declining amid inflation fears The national action imperative to achieve 30 by 30 Financial market transactions should not be taxed or restricted MORE (R-Utah).

“When the Administration deemed the conversation about Obamacare over after reaching enrollment targets, they were dead wrong,” he added. “These appalling findings not only question the validity of their numbers but show this poorly drafted law’s massive vulnerabilities to rampant waste and fraud.”