A devastating new Health and Human Services (HHS) Inspector General report released on Tuesday reveals that the Obama administration has yet to determine whether 1,295,571 of the over 8 million Obamacare enrollees are U.S. citizens lawfully in the country.
The finding, located on page 11 of the report, states that 44% of the remaining 2,611,780 application “inconsistencies” are related to verifying “Citizenship/national status/lawful presence.” Another 960,492 application inconsistencies were related to verifying whether subsidy applicants provided accurate income information.
Moreover, the Inspector General report only covered the federal Obamacare exchanges to determine how the Obama administration resolved verification problems through December 2013. As for the 15 state-run Obamacare exchanges, the report says four–Oregon, Nevada, Vermont, and Massachusetts–are simply “unable to resolve inconsistencies.”
As the Washington Post reported in May, as many as one million Obamacare enrollees may be receiving incorrect taxpayer-funded subsidies due to Obamacare’s continued technical failures and inability to properly verify income and citizenship eligibility.
One year ago, conservatives warned that the Obama administration’s decision to use the so-called “honor system” for income eligibility was merely a backdoor way to get as many individuals on the public dole as possible.
The Office of Inspector General determined that “the federal marketplace was generally incapable of resolving most inconsistencies.”
Obamacare will cost U.S. taxpayers $2.6 trillion over the next ten years.
Applications for insurance coverage through President Obama’s health care law submitted in the final three months of 2013 contained millions of inconsistencies in which information such as income and immigration status could not be independently verified by the federal government, according to a June report from the inspector general of the Department of Health and Human Services.
The inconsistencies may have resulted in individuals receiving an improper amount of subsidies, or subsidies that they shouldn’t have been eligible for in the first place – something that could require them to repay the money in future tax bills.
In other cases, inconsistencies led to bizarre outcomes. According to the report, “one marketplace cited situations in which infants and young children included on applications were erroneously identified as incarcerated.”
At issue is the information that individuals are asked to submit when they apply for coverage, such as income, citizenship status, Social Security number, or incarceration status. In theory, once data are submitted, they are supposed to be checked in a massive storage database known as the “hub,” which gathers data from multiple federal agencies.
“In some circumstances, the marketplace cannot verify an applicant’s information through available data sources,” the report explained. “When this happens, it is referred to as an inconsistency. This may arise when Federal data available through the Data Hub or data from other sources are unavailable or do not exist, or because the information on the application does not match the data received through the Data Hub or from other data sources.”
According to the HHS inspector general, applications submitted to the federal exchange in the opening months of Obamacare – October 2013 through December 2013 – contained over 2.9 million inconsistencies, of which more than 2.6 million, or 89 percent, remained unresolved as of Feb. 23, 2014.
To be clear, this does not mean that 2.9 million separate individual applications contained inconsistencies. Every applicant is prompted to answer a series of questions, and thus any given application can contain multiple inconsistencies. HHS could not provide data on the number of applications that included at least one, so there’s no way of saying what percentage of the total number of applications were affected. An inconsistency also doesn’t necessarily mean information is inaccurate, either, it just means it can’t be matched with available data.
The federal government has had an easier time resolving discrepancies related to Social Security numbers, while income and citizenship or lawful presence status have proven more challenging.
These numbers pertain only to the federal exchange that serve residents of 36 states, not the 15 states running their own exchanges.
The HHS inspector general also received reports from 11 states running their own exchanges disclosing an additional 1.2 million inconsistencies, though the states could be counting differently and thus the federal and state numbers cannot be easily combined.
“During our review, 4 of the 15 State marketplaces reported that they were unable to resolve inconsistencies (Massachusetts, Nevada, Oregon, and Vermont),” the report read. “They attributed this inability to failures in their information technology systems.”
While the government is awaiting more documentation from individuals to resolve inconsistencies, those individuals are allowed to receive benefits for 90 days. However, according to the report, “because of the Federal marketplace’s inability to resolve most inconsistencies, we were unable to determine the number of applicants who may have exceeded the 90-day inconsistency period or for whom the inconsistency period was extended by the Federal marketplace because the applicant demonstrated a good-faith effort in obtaining satisfactory documentation.”
In a response, the Centers for Medicare and Medicaid Services said that most inconsistencies are still within the 90-day window, but that Obamacare gives the authority to the Secretary of HHS “to extend the 90-day inconsistency period for applications for coverage for 2014.”
The inspector general noted that resolving inconsistencies was considered a lower priority in the early months of the Obamacare rollout due to the pressing technical problems facing the website. But the report concluded that, “marketplaces must resolve inconsistencies to ensure that eligibility determinations for enrollment in (qualified health plans) and for insurance affordability programs are accurate.”
The report recommended that CMS “develop and make public a plan on how and by what date the Federal marketplace will resolve inconsistencies” and bolster oversight of state-based exchanges.
In its response, CMS said that the inconsistencies were to be expected.
“It is not surprising that there are inconsistencies between some information provided by application filers and the electronic data sources, and, in fact, this issue is addressed in the Affordable Care Act,” CMS wrote. “This is the first year that consumers have applied for coverage through the Marketplaces. Therefore, consumers are inexperienced with the eligibility process, which could lead to application mistakes.”
Some of the issues could be explained because different data is available, CMS said. “For example, the Internal Revenue Service’s (IRS) tax data is generally two years old (i.e., tax return information for 2012 is used to verify income attestations for coverage for 2014.),” according to CMS.
The few million inconsistencies represents a “small number” compared to the “hundreds of millions of possible data inconsistencies,” given that any application can contain over 20 different pieces of data.
CMS said it agreed with the inspector general’s recommendations and was continuing to resolve the inconsistencies – manually, at first, until it develops an automated system later in the summer.