Agents get subsidized Obamacare using fake IDs

Undercover investigators using fake identities were able to secure taxpayer-subsidized health insurance under President Barack Obama's healthcare law, congressional investigators said Wednesday.

The weak link seemed to be call centers that handled applications for frazzled consumers unable to get through online.

The nonpartisan Government Accountability Office told a House committee that its investigators were able to get subsidized healthcare under fake names in 11 out of 18 attempts—even after HealthCare.gov's much maligned online system flagged some applications as problematic.

The GAO is still paying premiums for the policies, even as the Obama administration attempts to verify phony documentation.

Those follow-up verification checks also appeared to need tightening; the GAO said parts of the fake documentation it submitted for two applications actually got through the process.

Nonetheless, GAO audits and investigations chief Seto Bagdoyan told the House Ways and Means Committee that the agency has not drawn any sweeping conclusions from what he called its "preliminary" findings. A full assessment will take several months.

In the real world, it may be difficult for fraud artists to profit from the nation's newest social program, since government healthcare subsidies are paid directly to insurance companies.

Still, GAO's report opened another line of attack for Republican lawmakers who have relentlessly tried to kill the 2010 Affordable Care Act. It raised questions about new sorts of flaws in the enrollment system, which experienced computer gridlock when it went live last fall. Ultimately, 8 million people managed to sign up for subsidized healthcare in federal and state exchanges that handled Obamacare enrollment.

GAO also testified that there's still a huge backlog of applications with data discrepancies, even though the administration has resolved some 600,000 cases.

Rep. Charles Boustany (R-La.) said the findings point to more bungling by the Obama administration. "This is simply not a question of whether one likes the administration's health care law; it's a question of being good stewards of taxpayer dollars," he said.

Speaking for committee Democrats, Rep. John Lewis of Georgia said it's time for Republicans to stop trying to dismantle the healthcare law and instead start fixing problems. "We will not go back to a time when Americans did not have access to affordable health insurance," said Lewis.

The Obama administration is taking the report seriously.

"We are examining this report carefully and will work with GAO to identify additional strategies to strengthen our verification processes," said spokesman Aaron Albright. At least on paper, fraudsters risk prosecution and heavy fines.

The GAO said its investigators concocted fake identities using invalid Social Security numbers and falsely claiming citizenship or legal residence. In other cases, they made up income figures that would disqualify them from getting subsidies.

Among the findings:

• Contractors processing applications for the government told the GAO their role was not to ferret out potential fraud. "There is no provision to look for fraud, in the contract itself," said Bagdoyan.

• Five of six bogus phone applications went through successfully. The one exception involved an applicant who refused to provide a Social Security number.

• Six online applications were snagged by an identity checking system. But investigators just dialed a call center and all six were approved. That seemed to be an open pathway to coverage.

• The GAO also tried to check the reliability of counselors providing in-person assistance. In five out of six cases, investigators were unable to get help. In the final case, the counselor correctly told the undercover investigator that the agent's stated income would not qualify for subsidized coverage.