Though a sideshow throughout Obamacare’s passage and litigation, Medicaid’s pivotal role in President Obama’s health care reform effort has become apparent following the law’s October 1 implementation. In many states, Medicaid enrollment through the Healthcare.gov portal is dwarfing the number of “private” insurance plan purchases.

While this development represents a major financial threat to the survival of Obamacare, new regulations established by Obamacare to cover Medicaid enrollment have created a major threat to the United States’ ability to administrate that far larger benefit program.

Following is a summary of the problem:

While troubling, final approval of fraudulent applications represents a lesser element of the problem regarding non-citizen enrollment. The greater concern is initial approval:

  • Applicants attempting to register for Medicaid as non-citizens by using Healthcare.gov will have their identification checked in real-time by the SAVE (Systematic Alien Verification for Entitlements) database. But if SAVE verification fails, the applicant is not prevented from enrolling in Medicaid/CHIP.
  • In fact, the opposite occurs: the applicant is likely enrolled in Medicaid immediately.
  • The applicant is then given a 90-day period to clear up the identification problem.
  • This “enroll first, confirm later” regulation, combined with the ACA’s easing of verification requirements, allows anyone, from a computer anywhere in the world, to successfully auto-enroll for 90 days of Medicaid by entering fraudulent information about being a certain category of legal alien living in the United States.
  • There is no guarantee that state governments will take action to cancel these enrollments at the end of each application’s 90-day period if identification is never provided. The cancellation of unverified enrollments is left to each state’s available manpower and political will.
  • At the end of the 90-day period, if states do indeed ask the applicant to produce identification or to have the enrollment canceled, the applicant is allowed to ask for an extension of the 90-day period. The applicant can get the period extended for significantly longer.
  • Obamacare does not allow any information entered into Healthcare.gov to be used for legal action against illegal immigrants. Like “catch and release,” an applicant could attempt to fraudulently enroll repeatedly.
  • Foreign entities looking to flood the Medicaid rolls with fraudulent auto-enrollments are, of course, beyond U.S. prosecution and able to cause such chaos.
  • An organized effort by domestic or foreign entities to create countless numbers of these fraudulent enrollments could challenge Medicaid with an unsolvable administrative situation.