(WASHINGTON, D.C.) – U.S. Senator Tom Coburn, M.D. (R-OK) commented today on the reports released by the Department of Health and Human Services (HHS) Inspector General (IG) regarding the lack of safeguards to prevent improper subsidies under Obamacare.

“The reports released today highlight that the federal government lacks necessary safeguards to prevent taxpayers from providing improper subsidies to illegal immigrants, individuals who are incarcerated, or individuals whose income is too high to qualify for a subsidy,” Dr. Coburn said.  “The Obama Administration has failed to keep its promise that effective controls were in place to prevent waste and fraud in Obamacare payments.  These reports show a trend of broken promises in Obamacare’s botched implementation.”  

HHS IG reports summary:

HHS IG released two reports today on inconsistencies within applications for health insurance on a state or federal exchange.  An inconsistency occurs when the information reported by an applicant cannot be verified, and can result in ineligible individuals (such as illegal immigrants, individuals who are incarcerated, or individuals whose income too high to receive Obamacare subsidies) receiving taxpayer subsidies under Obamacare.  The most common inconsistencies reported from the Federal and State marketplaces were inconsistencies related to income and citizenship.

These reports, mandated by the Consolidated Appropriations Act, 2014, are the first two in a series of reports the IG plans to conduct on HHS’ activities to verify the eligibility of health care applications within federal and state exchanges.

IG Findings:

“The Federal marketplace was generally incapable of resolving most inconsistencies. Without the ability to resolve inconsistencies in an applicant’s eligibility data, the marketplace cannot ensure that an applicant meets each of the eligibility requirements for enrollment in a QHP [qualified health plan] and when applicable, eligibility for insurance affordability programs.”

Federal Marketplace:

• 89 percent of inconsistencies were unresolved (2.6 million out of 2.9 million inconsistencies) because the system was not fully operational
• Most of these inconsistencies related to citizenship, national status, lawful presence, income, and employer-sponsored minimum essential coverage
• The Federal marketplace was capable of resolving inconsistencies with Social Security numbers, non-employer minimum essential coverage, incarceration status, and whether the applicant is an Indian. However, even though CMS’ system to process these types of inconsistencies was operational, it only resolved less than 1 percent of these inconsistencies.

State Marketplaces:

Out of the 15 states that did not use the Federal marketplace:

• Massachusetts, Nevada, Oregon, and Vermont reported they were unable to resolve inconsistencies
• California reported it resolved some inconsistencies but lacked the resources to resolve all of them
• Hawaii, Minnesota, and Colorado relied on their state Medicaid offices to resolve inconsistencies (Hawaii and Minnesota reported that all applicants apply for Medicaid before applying for a QHP)
• The seven remaining state marketplaces (Connecticut, D.C., Kentucky, Maryland, New York, Rhode Island, and Washington) reported they resolved the inconsistencies. However, the IG’s second report which included a review of Connecticut’s exchange found, despite reporting it resolved inconsistencies, “The Connecticut marketplace determined applicants to be eligible for insurance affordability programs when they were not eligible.”

Dr. Coburn’s Previous Work on this Issue:

Senators Hatch, McConnell and Coburn sent a letter urging HHS IG to carefully examine reports that the government may be paying incorrect Obamacare subsidies. Find more information here: http://coburn-senate-gov.sites.frontrunnercms.com/public/index.cfm/pressreleases?ContentRecord_id=02255264-0ece-44d2-b187-502a71c7b3e2 

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