Some federal exchange-plan customers are being unfairly denied subsidized coverage, or are losing their premium subsidies entirely because of document-processing problems, even as congressional Republicans push for stronger anti-fraud measures.
A recent report from the Government Accountability Office found that the CMS does not have an effective process for resolving inconsistencies in individuals' applications. Last year, about 470,000 people completely lost their healthcare coverage, and more than 1 million lost at least part of their subsidies because they had difficulty proving their eligibility.
The same report found that 11 out of 12 fake identities created by GAO investigators were approved for subsidized coverage, despite fraudulent or nonexistent documentation. It also noted that the CMS has not done a comprehensive fraud risk assessment, and that the contractor that provides document processing is not required to have fraud-detection capabilities.
At a Senate Finance Committee hearing this week focusing on the federal exchange, Sen. Ron Wyden (D-Ore.) said the GAO investigation has not uncovered “one single shred of real-world fraud,” and noted the numerous real-world cases of consumers unfairly losing their premium tax credits or having them reduced.
“If you come at this from the left, you might say that's too harsh,” Wyden said. “If you come at it from the right, you might take a different view. But there is no basis whatsoever for the argument that HHS ignores problems in people's records, or leaves the door open to fraud.”
Wyden said the committee should be looking at pressing issues such as increasing insurance competition, reducing prescription drug prices and improving care for chronic conditions, rather than “rehashing old news.”
Judith Solomon, vice president for health policy at the left-leaning Center on Budget and Policy Priorities, said it's likely that the vast majority of people who are denied subsidized coverage are actually eligible. Problems arise because of legal name changes, or a lack of immigration documents. Income information is verified through tax forms, but those forms may have out-of-date or incomplete information.
The GAO report noted that representatives at HealthCare.gov call centers don't always have the latest information on the status of an individual applicant's eligibility documents. HHS said it is working on a plan to provide representatives with real-time data.
Other reports from watchdog agencies have found that the federal marketplace does not have adequate controls for verifying citizenship status, income, or family size.