The PJ Tatler

GAO Investigation Finds ObamaCare Subsidies Wide Open to Fraud

An undercover Government Accountability Office (GAO) investigation revealed that there is no system in place to monitor the exchanges enrollment process, leaving it wide open to fraud.


In 2014, GAO began a “secret shopper” investigation designed to test whether or not the federal healthcare exchange (Marketplace) was able to detect and prevent falsified applications from being accepted. The results were glaring. Of the 12 fictitious identities that applied for taxpayer subsidies, 11 were approved, which is a 91 percent failure rate. Over the course of 2014, the government paid out $30,000 to these fake individuals. Investigators were able to obtain subsidies even though they provided false proof of income, documentation of citizenship, and Social Security numbers. The Marketplace made zero effort to validate any information.

Even after officials were tipped off that investigators had set up several bogus accounts, they failed to catch any of them.

This tragic comedy of errors went on for 16 months. For example, when the exchange later asked the undercover “enrollees” to submit supporting documents, they replied with counterfeits, if they replied at all. Yet none of them lost their coverage.

In one case, the investigator sent zero documents in response to that request, then called the exchange to ask about his status and was told, “Your application status is complete.”


The much-touted ObamaCare “data hub” that was allegedly completed right before ObamaCare’s launch should have caught at least some of the fake applicants.

The Washington Post reported in September of 2013:

Federal health officials said they have completed the “data hub,” a complex system that will verify people’s Social Security numbers, immigration status and other information when they log on to government Web sites to buy health plans and apply for government subsidies.

The milestone is a significant victory for the administration, which is battling growing skepticism that it will be ready Oct. 1, when people are supposed to be able to start signing up for health plans under the law, commonly called Obamacare. For months, officials have faced questions about whether the computer systems, which are exceedingly complex, would be up and running in time.

Nearly two years later and if there is a data hub up and running, it does not seem to be being used adequately.

“It confirmed what we feared,” the Ohio Republican told Fox News’ “America’s Newsroom” program on Thursday.

“One thing they also found out is so many legitimate taxpayers are so confused they are ending up getting their refunds cut,” said Portman. “Two-thirds of the people getting the subsidies are experiencing this. The IRS says half of the people are having their tax bills coming to the door or getting the refunds cut. It’s really confusing to the taxpayers, and there is a lot of fraud.”

Johnson said there will be congressional hearings about the report at which lawmakers will try to figure out how the fraud happened and how to fix the problem.

“The American people are frustrated by Obamacare for a lot of reasons,” said Johnson, noting the exchanges are poorly administers.

Given the importance of this story, you can bet the rest of the media was all over it,  right?

Not so much. CBS and NBC on Thursday skipped the story completely. ABC’s Good Morning America devoted all of 17 seconds to the topic.

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