Agents able to get Obamacare subsidies using fake IDs

WASHINGTON -- Undercover investigators using fake identities were able to secure taxpayer-subsidized health insurance under President Barack Obama's health care law.

The weak link in the system seemed to be call centers that handled applications for thousands of consumers unable to get through online.

The nonpartisan Government Accountability Office was to tell a House committee on Wednesday that its investigators were able to get subsidized health care under fake names in 11 out of 18 attempts.

The GAO is still paying premiums for the policies, even as the Obama administration attempts to verify phony documentation. Those additional checks appeared to need tightening; the GAO said parts of the fake documentation it submitted for two applications actually got verified.

The agency's findings are contained in testimony to be delivered at the House Ways and Means Committee hearing. An advance copy was provided to The Associated Press.

The GAO report will provide another line of attack for Republican lawmakers who have relentlessly tried to kill the 2010 Affordable Care Act. It raises questions about new sorts of flaws in the enrollment system for HealthCare.gov, which experienced major technical problems when it went live last fall. Ultimately, 8 million people managed to sign up for subsidized health care in federal and state exchanges that handled "Obamacare" enrollment.

Seto Bagdoyan, head of GAO audits and investigations, will also testify that there's still a huge backlog of applications with data discrepancies, even though the administration has resolved some 600,000 cases.

The GAO tests revealed potential weaknesses in the nation's newest social program. However, in the real world, it may be difficult for fraudsters to profit, since government subsidies are paid directly to insurance companies.

Still, Ways and Means Committee Chairman Dave Camp, R-Mich., said the health law was rife with "incompetence, waste and the potential for fraud."

Sen. Orrin Hatch, R-Utah, quipped, "'Obamacare' is working really well - for those who don't exist."

The administration pointed out that six of the GAO's fake online applications were blocked by eligibility checks built into computer systems at HealthCare.gov. Still, the GAO says its undercover agents found a way around that by phoning the call centers and were able to enroll anyway.

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"We are examining this report carefully and will work with GAO to identify additional strategies to strengthen our verification processes," administration spokesman Aaron Albright said. 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.
• 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.

This news comes a day after a court in Washington called into question the subsidies that help millions of low- and middle-income people pay their premiums, saying financial aid can be paid only in states that have set up their own insurance markets, or exchanges. About 100 miles to the south, in Richmond, Virginia, another appeals court panel unanimously came to the opposite conclusion.