NCPA - National Center for Policy Analysis

Observations on 18 Undercover Tests of Enrollment Controls for Health-Care Coverage and Consumer Subsidies Provided under the Act

July 30, 2015

The Government Accountability Office (GAO) conducted undercover tests to assess the enrollment controls of the Affordable Care Act (ACA) federal Health Insurance Marketplace. The Marketplace approved 11 of the 12 fictitious applicants who received a total of $30,000 in annual advance premium tax credits, plus eligibility for lower costs at time of service.

  • For 7 of the 11 fictitious applicants, the GAO intentionally did not submit all required verification documentation but their subsidized coverage was not cancelled.
  • The Marketplace did not accurately record all inconsistencies.
  • The Marketplace reported incorrect information for tax filing purposes for 3 of the enrollees.
  • The Marketplace terminated coverage for 6 of the 11 enrollees because they lacked necessary documentation, however the GAO was able to reinstate 5 of the terminations and received increases in subsidies.
  • GAO was not able to receive telephone assistance for 5 of the 6 enrollees.

To be eligible, the individual must be a U.S. citizen, not be incarcerated and they shall be determined if they are eligible for income-based subsidies. The tests included fictitious applications who provided invalid Social Security identities, noncitizens and applicants who did not provide Social Security numbers. GAO used publicly available hardware and software to produce fictitious documents to submit.

The Marketplace resolved inconsistencies that should have disqualified applicants from subsidies to allow them to continue subsidies. When reviewing documentation, the document-process contractor does not inspect for fraud because it is not equipped to do so.

A "good-faith effort" policy has been employed for applicants that have submitted at least one documentation to not cancel their policy, but this does not explain the three applicants that had no documentation but received subsidies.  For three applicants there were open inconsistences related to citizenship status. GAO never submitted any citizenship documentation to the Marketplace but still had subsidized coverage restored.

Source: Seto Bagdoyan, "Observations on 18 Undercover Tests of Enrollment Controls for Health-Care Coverage and Consumer Subsidies Provided under the Act," Government Accountability Office, July 16, 2015.


Browse more articles on Health Issues