A Washington Post story this week about failures - both computer and human - in the screening process for people seeking Obamacare subsidies only serves to deepen concerns about whether millions of people who signed up through balky federal and state websites are receiving subsidies that are incorrect or to which they are not entitled.
Earlier this month we wrote on this page about the administration's struggle to resolve "inconsistencies" in 2.6 million of the 2.9 million applications for insurance coverage processed through the federal exchange between October and December of 2013.
We cited a report from the inspector general of the Department of Health and Human Services that found 89 percent of those fourth-quarter applications contained personal information that didn't square with other government information on the applicant, such as income, immigration status or whether the person is lawfully in the country.
Now comes the Washington Post story about a Government Accountability Office probe that found gaping holes in the subsidy qualification process for sign-ups on Obamacare exchanges.
As a test of the system, GAO investigators attempted to obtain subsidized health plans for fictitious applicants using invalid or missing Social Security numbers or inaccurate citizenship information. Of a dozen fake applicants, the GAO says 11 ended up getting subsidized coverage and have kept it. The 12th application was originally denied but was approved after a second try.
Screening by in-person Obamacare facilitators didn't prove much more effective. The GAO said in six attempts to sign up phony applicants with six different facilitators, only one accurately told an investigator that the income they reported was too high to qualify for a subsidy.
Republicans were quick to pounce. House Ways and Means Committee Chairman Dave Camp told the Post, "We are seeing a trend with Obamacare information systems: under every rock there is incompetence, waste and potential for fraud. Now we learn that in many cases the exchange is unable to screen out fake identities or documents."
The GAO report also contained an update on the aforementioned "inconsistencies" in millions of Obamacare applications. At the time of the HHS inspector general's report the administration had only resolved 10,000 of the 2.6 million application "inconsistencies." The GAO update indicates 650,000 inconsistencies have been resolved, but 2.6 million remain as of mid-July, the result of additional sign-ups for coverage in the first quarter of 2014.
As we noted in a previous editorial, the specter of these widespread problems with verifying eligibility for, not to mention proper levels of, subsidies is ominous. It is a formula for chaos if around tax time next year it is discovered that millions of Obamacare enrollees have received incorrect subsidies or subsidies to which they aren't entitled at all. There's also the potential that people who submitted incorrect information through the exchanges will be deemed to have no coverage, exposing them to fines for violating the individual mandate. They could also face clawbacks from insurance companies that paid claims based on false or incorrect information on the applications.
The problems with the Obamacare exchanges remain vast, and although they have largely slipped out of the public's short attention span in recent months, focus could come back with a vengeance when the real mess starts to unfold later this year.
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