Report Finds Vulnerabilities in Health Insurance Exchange Enrollment

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By James Swann

Aug. 10 — Citizenship and household income data weren't properly verified for all applicants to the federally run health insurance marketplace in 2014, calling into question their eligibility for enrollment in Affordable Care Act plans as well as premium assistance for health insurance coverage, according to a government report released Aug. 10.

Additional enrollment vulnerabilities that were identified included failure to validate Social Security numbers, failure to correctly calculate the size of an enrollee's family and failure to resolve inconsistencies between an enrollee's application and federal data, according to the Health and Human Service Office of Inspector General report, which examined a sample of 90 enrollees.

“Without properly verifying an applicant’s eligibility and properly resolving and expiring inconsistencies, the Federal marketplace cannot ensure that the applicant meets eligibility requirements for enrollment in a QHP [qualified health plan] and for insurance affordability programs and that the amounts of the APTC [advance premium tax credit] and cost-sharing reductions are determined correctly,” the report said.

However, the report noted that the enrollment vulnerabilities didn't mean that anyone was improperly enrolled or received improper premium assistance.

Kirk Ogrosky, an attorney with Arnold & Porter and former federal prosecutor, told Bloomberg BNA Aug. 10 he wasn't surprised that information submitted by enrollees didn't always match the information held by the federal government.

“The fact that information doesn’t match is not an indication that potential enrollees were providing incorrect information, nor is it facially indicative of abuse or fraud,” Ogrosky said.

Ogrosky said data inconsistencies often are merely the result of people providing information that doesn't match information that was previously entered into a government system.

“Ferreting out what was entered incorrectly either recently or in the past is a substantial process,” Ogrosky said.

Under the ACA, enrollees in the federal health insurance marketplace must meet certain eligibility standards in order to enroll in a plan and receive financial support.

Enrollee Review

The OIG reviewed application documentation for a sample of 45 individuals who enrolled in the federal insurance marketplace between January and April 2014, as well as documentation for a sample of 45 individuals who enrolled between October and December 2013.

The 2013 applicants had been part of a previous OIG review released in June 2014, which hadn't been able to test internal controls associated with resolving data inconsistencies within the federal marketplace

While all of the 45 enrollees from 2014 submitted Social Security numbers in their applications, the federal marketplace failed to validate that information for 41 enrollees because of a defect in the system that the Centers for Medicare & Medicaid Services said was fixed in August 2014.

The remaining four enrollees submitted Social Security numbers, but marketplace data didn't indicate whether numbers were validated by the Social Security Administration, the OIG said.

Citizenship Verification

The OIG found other data elements lacking that are necessary for determining an enrollee's eligibility, such as citizenship and household income.

Out of 42 applicants who attested they were U.S. citizens, the federal marketplace failed to confirm the citizenship of one applicant because it didn't validate that individual's Social Security number.

In addition, the OIG found no data indicating the CMS validated the applicant's citizenship through the Department of Homeland Security (DHS), which is a backup verification method if Social Security validation isn't available.

While the marketplace should have asked the applicants for the necessary documentation to prove citizenship and placed them in an inconsistency period, it instead determined that the applicant was eligible for premium assistance.

An inconsistency period refers to a 90-day window in which applicants must submit documentation to resolve questions in the enrollment process.

As for household income, the OIG found that one applicant with household income improperly determined. The applicant said she had a household income of $29,000 as a result of her husband's job, but federal data determined the household income was actually $36,000, because it included $7,000 from a child living with the couple.

The applicant should have been placed in an inconsistency period, but the CMS verified the income and qualified the woman for premium assistance.

Data Inconsistencies

Beyond problems validating applicant data, the OIG also said the Centers for Medicare & Medicaid Services didn't always maintain accurate and up-to-date applicant data as well as documentation indicating data inconsistencies were resolved.

For example, the OIG found that one applicant was placed into an inconsistency period due to a lack of supporting documentation proving the applicant's citizenship. While the applicant provided the CMS with a copy of a U.S. permanent resident card, the inconsistency hadn't been resolved by December 2014, when the OIG visited the CMS contractor, because the contractors couldn't find the applicant's data. (The CMS informed the OIG on April 1 that the inconsistency had been resolved.)

The OIG also found that the CMS extended inconsistency periods indefinitely for several applicants, allowing them to access premium assistance based on good-faith efforts to provide supporting documentation.

In one case, an applicant was placed into an inconsistency period because the CMS couldn't verify their household income.

The applicant submitted a naturalization certificate, which the CMS deemed to represent a good faith effort to validate household income, and as of December 2014, the applicant was still in an inconsistency period and eligible for premium assistance, even though a naturalization certificate contains no information about household income.

OIG Recommendations

The OIG recommended that the CMS strengthen internal controls surrounding the enrollment process, including:

• placing applicants into an inconsistency period when citizenship can't be verified by either the SSA or the DHS;

• ensuring that Social Security numbers are validated by the SSA; and

• placing applicants into an inconsistency period when their reported household income is more than 10 percent below what federally available data say.


The OIG also said the CMS should reexamine the eligibility of the sampled enrollees and improve the procedures for resolving data inconsistencies, noting that inconsistency periods shouldn't be extended indefinitely.

The CMS agreed with all of the OIG's recommendations, and said it has already reviewed five of the sample applicants and determined that their eligibility was appropriate. The CMS said it would review the remaining sample applicants as well.

The name of the report is “Not All of the Federally Facilitated Marketplace's Internal Controls Were Effective in Ensuring That Individuals Were Properly Determined Eligible for Qualified Health Plans and Insurance Affordability Programs” (A-09-14-01011).

To contact the reporter on this story: James Swann in Washington at

To contact the editor responsible for this story: Kendra Casey Plank at


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