Another Cover-Up? IRS, Social Security Administration Not Co-Operating with Investigation of Fraudulent ObamaCare Enrollment

At the beginning of last month, this blog discussed the fact that over two million (of a total of eight million) ObamaCare applications lacked income, citizenship, or immigration data to verify eligibility for ObamaCare’s tax credits. In the middle of the month, the Administration began contacting “hundreds of thousands of people with subsidized health insurance to resolve questions about their eligibility, as consumer advocates express concern that many will be required to repay some or all of the subsidies.”

Now, the Inspector General (IG) of the U.S. Department of Health & Human Services has confirmed that “The deficiencies in internal controls that we identified may have limited the marketplaces’ ability to prevent the use of inaccurate or fraudulent information when determining eligibility of applicants for enrollment…”

That’s putting it mildly. Far worse is that the IG is unable to investigate eligibility based on income or residency because the IRS and Social Security Administration appear not to be co-operating with his investigation (pp. iv-v):

During our fieldwork, questions arose concerning OIG’s access under the Internal Revenue Code to Federal taxpayer information that IRS provides to marketplaces. We sought authorization from IRS to access that information. Because the request was still pending when we had completed our data collection, we did not review supporting documentation for certain eligibility requirements, such as annual household income and family size, for the purpose of this report.3 As a result, we could not evaluate whether each marketplace determined the 45 sample applicants’ eligibility for advance premium tax credits and cost-sharing reductions according to Federal requirements.

Further, we did not determine whether information submitted by the 45 sample applicants at each marketplace was inaccurate or fraudulent because we could not independently verify the accuracy of data stored at other Federal agencies, e.g., IRS and SSA. Instead, we focused our review on determining the effectiveness of internal controls for processing that data and addressing inconsistencies in eligibility data when identified by the marketplace.

(Note: “Marketplace” is the bureaucratic term for an ObamaCare health insurance exchange, not an actual marketplace.)

The victims of this apparent stonewalling include those who were misled by ObamaCare “navigators” into applying for subsidized coverage in the ObamaCare exchanges. Remember that these people did not actually receive tax credits themselves. They were paid directly to health insurers. However, if the beneficiaries were ineligible for subsidies, the IRS will be coming after them, not their health insurers, to be paid back.

The IRS and other federal agencies have a responsibility to come clean about their part in the fiasco of ObamaCare’s open enrollment. Perhaps more Congressional oversight and investigation is required.

Comments (14)

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  1. Big Truck Joe says:

    Those who lied about income or are illegal immigrants will obviously be “pardoned” by Obama with the stroke of a pen because no good Democrat wants the IRS or Homeland Security going after fraudulent Obamacare enrollees, especially during an election year. These deficiencies will soon be swept under the rug…at the expense of the taxpayer of course.

    • Greg Scandlen says:

      That’s right. Giving people money is just another way of stimulating the economy. It’s all good. Nothing to see here. Let’s move along, people.

  2. Perry says:

    Who didn’t see this coming? Oh yeah, the Obama administration…

  3. Big Truck Joe says:

    Happy Independence Day and God bless America!!!!

  4. Thomas says:

    “Remember that these people did not actually receive tax credits themselves. They were paid directly to health insurers. However, if the beneficiaries were ineligible for subsidies, the IRS will be coming after them, not their health insurers, to be paid back.”

    What kind of double standard is this? It sounds like the government and insurance companies are the ones handling the dispensing of subsidies, why aren’t they the ones who fix it?

    • John R. Graham says:

      It goes to a real purpose of the exchange. Health insurers are used to the group market, where businesses pay premiums unless they go into financial distress. Managing the credit risk of individual premiums is not something health insurers really want to do (although auto and life insurers succeed in doing it).

      So, one purpose of an Obamacare exchange is to ensure that the tax credit suffers minimal friction en route from the Treasury Department to the health plan. If the tax credits were paid to beneficiaries, and insurers had to invoice the entire premium from beneficiaries, that introduces risk that health insurers prefer the government reduce.

  5. Matthew says:

    There needs to be some additional oversight, seeing as the IRS and SSA refuse to comply with the investigation. Sounds like they have a different agenda.

  6. Buddy says:

    “…that over two million (of a total of eight million) ObamaCare applications lacked income, citizenship, or immigration data to verify eligibility”

    Come one, come all, they will take anyone. Literally anyone! No income, no citizenship, no problem!

  7. SPM says:

    All of you guys are right on the money. This was so predictable – boost Obamacare enrollment numbers through any means possible in order to make it look like people actually like the ACA. We know that out-of-pocket costs drop dramatically with these subsidies, so the uninsured obviously will try to qualify for as much free money as possible, all while the taxpayer gets stuck with the bill!

  8. Studebaker says:

    This post reminds me of an old Meatloaf song. Except, in this case, it should be titled… Three Out of Four Ain’t Bad!”

    • Buster says:

      How would the words to that song go?

      “I want you; I need you; I enrolled in you…
      But there ain’t no way I’m ever gonna pay you… but don’t be sad… three out of four ain’t bad!

  9. Brian Stepp says:

    Who funds this site?Could it be right wing zelots or the Koch Bros.