Though enrollees report satisfaction with health insurance obtained under the Affordable Care Act, the state-based marketplace exchanges remain vulnerable to fraudulent applications, the Government Accountability Office found.
In a pair of new reports, auditors reported results of undercover testing of the program’s verification of eligibility for what in many cases is subsidized care. They found that 10 of 18 fictional applications cleared the identity-checking process despite deliberately erroneous information.
In 2015, GAO attempted to submit the 18 applications by telephone and online through the federal marketplaces in New Jersey and North Dakota, and through state marketplaces in California and Kentucky. Although 8 of the 10 fictitious applications that were eventually approved failed the initial online identity-checking process, all 10 were subsequently successful, one report said.
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“Four applications used Social Security numbers that, according to the Social Security Administration, have never been issued, such as numbers starting with 000,” GAO wrote. “Other applicants obtained duplicate enrollment or obtained coverage by claiming that their employer did not provide insurance that met minimum essential coverage.”
Other phone applications were approved for enrollment in Medicaid. For eight fictitious applications, “GAO was approved for subsidized health-care coverage in seven of the eight cases, through the federal marketplace and the two selected state marketplaces.”
In addition to fake Social Security numbers, GAO undercover applications for enrollment included a fake immigration card, or no identity documents at all. Those were still approved.
In a separate report using undercover applications for 2016 in California and West Virginia, GAO auditors applied the same techniques after a requirement for past recipients to file federal tax returns kicked in. The same vulnerability was demonstrated. “The marketplaces initially approved coverage and subsidies for GAO's 15 fictitious applications,” GAO reported. “However, three applicants were unable to put their policies in force because their initial payments were not successfully processed. GAO focused its testing on the remaining 12 applications.”
For eight applications, GAO used new fictitious identities to test verifications related to identity or citizenship/immigration status and, in each case, successfully obtained subsidized coverage.
The Health and Human Services Department’s Centers for Medicaid & Medicare Services said some of GAO's application outcomes could be explained by decisions to extend document filing deadlines.
GAO has eight ongoing recommendations to CMS to strengthen its oversight of the federal marketplace, and CMS is implementing them.
In a third related report, GAO reported that data from five national surveys over the past three years show that most enrollees who obtained their coverage through the health insurance exchanges were satisfied overall with their qualified health plans. “The surveys reported that… enrollees' satisfaction with their plans was either somewhat lower than or was similar to that of those enrolled in employer-sponsored health insurance in 2015 and 2016,” GAO said. “To varying degrees, QHP enrollees expressed satisfaction with specific aspects of their plan, including their coverage and choice of providers, and plan affordability.”
However, a literature review and interviews with experts, state departments of insurance and others revealed some concerns, GAO reported. “Some enrollees found it too expensive to pay for their out-of-pocket expenses before reaching their deductibles and have reported concerns about affording care or have been deterred from seeking care,” GAO found. “Some enrollees have faced difficulties understanding their QHP's coverage terminology and others have faced problems accessing care after enrollment.”