Federal probe finds fake ACA signups go undetected

An inquiry by the Government Accountability Office found that improvements to the federal insurance marketplace are still needed to ensure that potential fraud is detected (Source: “Federal undercover investigation signs up fake applicants for ACA coverage, subsidies,” Washington Post, July 22, 2014).

According to testimony to be delivered before a House Ways and Means subcommittee, undercover GAO investigators tried to obtain health plans for a dozen fictitious applicants online or by phone, using invalid or missing Social Security numbers or inaccurate citizenship information.

All but one of the fake applicants ended up getting subsidized coverage — and have kept it. In one instance, an application was denied but then approved on a second try. In six other attempts to sign up fake applicants via in-person assisters, just one assister accurately told an investigator that the applicant’s income was too high for a subsidy. 

The GAO’s account of fictitious applicants obtaining subsidized coverage goes beyond a related problem that surfaced this spring and that the investigators also cited: The government may be paying incorrect insurance subsidies to a significant share of the 5.4 million Americans who signed up for health plans for this year through the federal marketplace. The GAO testimony contains updates on that problem, saying that, as of mid-July, about 2.6 million “inconsistencies” existed among applicants who had chosen a health plan and that 650,000 of them had been resolved.