How hard is it to cheat to get some of the $56 billion the federal government is spending on health insurance subsidies under Obamacare? Pretty easy, an undercover study by the Government Accountability Office (GAO) indicates.
For the third year in a row, GAO tested the Affordable Care Act marketplaces by filing fictitious applications for subsidies, most of which were approved. “As previously reported for the 2014 and 2015 coverage years, GAO’s undercover testing for the 2016 coverage year found that the health-care marketplaces’ eligibility determination and enrollment processes remain vulnerable to fraud,” the 2016 report said.
In 2015, the marketplaces approved each of 10 fictitious applications for subsidies to buy health insurance plans, while in 2016—the first year for which subsidy eligibility verification was required from filed tax returns—12 of 15 fake applicants were finally approved.
In 2016, about 85 percent of the 11.1 million ACA marketplace consumers are receiving subsidies. While the GAO said its findings can’t be generalized to the full population of enrollees, they are a warning sign.
The American Action Forum (AAF), a free market-oriented think tank that is critical of the ACA, compares the potential for government waste from the ACA to the earned income tax credit for low-income workers. The AAF reports that about a quarter of the federal government’s $60 billion to $70 billion in annual expenditures for the earned income tax credit go to people who don’t qualify for the credit.
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