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HHS Overseer Finds Faulty System for Determining Obamacare Subsidies

Can't clear up 89 percent of "inconsistencies" because automated system not yet fully operational.

Bill Straub


July 3, 2014 - 10:35 am
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WASHINGTON — The federal Health Insurance Marketplace and several state exchanges that permitted consumers to apply for mandatory coverage under Obamacare failed to implement adequate safeguards for determining who was eligible to receive subsidies to help defray the costs of the premiums.

According to a pair of reports issued this week by Daniel R. Levinson, the inspector general for the Department of Health and Human Services, about 2.9 million “inconsistencies” were uncovered in the applications of those seeking eligibility under the Affordable Care Act during the first three months of this year. To this point, the department has proved unable to clear up 2.6 million of those inconsistencies – 89 percent – because its automated system used to determine eligibility is not yet fully operational.

Most of the discrepancies, according to the report titled “Marketplaces Faced Early Challenges Resolving Inconsistencies with Applicant Data,” involved the income and citizenship of those seeking health insurance. Only those below certain income levels are eligible for federal subsidies and only American citizens are eligible for the program.

“The Federal marketplace was generally incapable of resolving most inconsistencies,” the report said. “Without the ability to resolve inconsistencies in an applicant’s eligibility data, the marketplace cannot ensure that an applicant meets each of the eligibility requirements for enrollment in a QHP (qualified health plan) and when applicable, eligibility for insurance affordability programs.”

Each application, Levinson said, “can have multiple inconsistencies. Inconsistencies do not necessarily indicate that an applicant provided inaccurate information or is enrolled in a qualified health plan or is receiving financial assistance through insurance affordability programs inappropriately.” Even when consumers provided documentation verifying the information they provided, the government often proved unable to resolve conflicts between their official records and data on application forms.

Levinson asserted that the Department of Health and Human Services failed to implement the controls necessary to perform basic tasks like validating Social Security numbers and verifying the identity of people who applied via telephone.

In the 15 states that operated their own marketplaces outside of the federal system, four reported that they were unable to resolve inconsistencies, seven said they resolved inconsistencies without delay, one reported it resolved only some inconsistencies, and three reported that their state Medicaid offices resolved inconsistencies.

“We also found that data on inconsistencies are limited,” the inspector general said. “For example, the federal market place could not determine the number of applicants who had at least one inconsistency. Finally, marketplaces faced challenges resolving inconsistencies despite having policies and procedures in place.”

According to the report, the federal marketplace maintains it will verify applications with inconsistencies when the eligibility system becomes operational.

The inspector general’s report opens up a new line of attack for those who remain opposed to the Affordable Care Act, passed in 2010, which remains the cornerstone of President Obama’s policy agenda.

Under what has popularly become known as Obamacare, U.S. citizens are required to obtain some form of health insurance. The federal government provides subsidies to those unable to afford the premiums. Large corporations, beginning in 2015, will be required to provide employees with health insurance.

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All Comments   (5)
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Of course the system for determining subsidies is faulty- by design. The ACA was designed to create a crisis where we all demand what Obama wanted in the first place- single payer.... AFTER the free market insurance industry is destroyed beyond repair- which is the only thing that "Obabacare" is actually designed to do. Nothing associated with the unconstitutional piece of power grab legislation functions as advertised. That is deliberate.
34 weeks ago
34 weeks ago Link To Comment
I think it is time for House Democrats to introduce a bill to impeach President George W. Bush.

This madness just has to stop.
34 weeks ago
34 weeks ago Link To Comment
It sounds as if Obamacare is going down in flames and no one in DC has noticed. People with health insurance cards of dubious validity will be asked to pay up front at the doctor's office. This is in addition to the co-pays that can be high in the lower plans should the doctor decide to accept the dubious Obamacare card. Expanding Medicaid will not be the solution the uninsured thought as doctors can and do limit the number of Medicaid patients they accept. In my state (West Virginia) Medicaid pays less than other plans and can take as long as two years for payment to reach the doctor. You have to wonder when the frustration levels of doctors and patients will boil over and what the fix could possibly be for this silly system.
34 weeks ago
34 weeks ago Link To Comment
Bill, suppose I went to Kroger and said I qualify to pay 50 cents a gallon for milk, and bill the federal government for the rest.

Kroger has been promised by the federal government this is the law and totally legit. Milk retails at $3.00 a gallon, Kroger accepts 50 cents from me, and bills the federal government the rest $2.50).

So far I have bought 100 gallons of milk at 50 cents each, and Kroger hasn't received a penny of what the government said it would pay to make up the difference. The government now owes Kroger $250.

Now, you can call this scheme a lot of things. One hundreds years ago it would have been called a shell game, snake oil trick, Ponzi scheme, taxpayer theft, and a few others. One thing this is not is a "Marketplace". Only in an Orwellian world where a lie means truth and yes means no can this process be called a "marketplace".

34 weeks ago
34 weeks ago Link To Comment
Nice observation and excellent demonstration.

Double speak is a tactic too often employed by the Left. Charity means voting while somebody else pays for it; taxes mean "revenue" without associated cost; reproductive health is associated with well fitness and not murder; proof ID to vote with voter suppression; tolerance with personal acceptance, etc... etc... etc...
34 weeks ago
34 weeks ago Link To Comment
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