Another Cover-Up? IRS and Social Security Administration Not Cooperating with Obamacare Fraud Investigation

In early June, we learned that over two million (of a total of eight million) Obamacare applications lacked income, citizenship, or immigration data to verify eligibility for Obamacare’s tax credits. In the middle of the month, the Obama administration began contacting “hundreds of thousands of people with subsidized health insurance to resolve questions about their eligibility, as consumer advocates express concern that many will be required to repay some or all of the subsidies.”

Now, the Inspector General (IG) of the U.S. Department of Health and Human Services has confirmed that the agency was lax in preventing ineligible enrollments: “The deficiencies in internal controls that we identified may have limited the marketplaces’ ability to prevent the use of inaccurate or fraudulent information when determining eligibility of applicants for enrollment…”

That’s putting it mildly. Far worse is that the IG is unable to investigate eligibility based on income or residency because the IRS and Social Security Administration appear not to be cooperating with the investigation (pp. iv-v):

During our fieldwork, questions arose concerning OIG’s access under the Internal Revenue Code to Federal taxpayer information that IRS provides to marketplaces. We sought authorization from IRS to access that information. Because the request was still pending when we had completed our data collection, we did not review supporting documentation for certain eligibility requirements, such as annual household income and family size, for the purpose of this report.3 As a result, we could not evaluate whether each marketplace determined the 45 sample applicants’ eligibility for advance premium tax credits and cost-sharing reductions according to Federal requirements.

Further, we did not determine whether information submitted by the 45 sample applicants at each marketplace was inaccurate or fraudulent because we could not independently verify the accuracy of data stored at other Federal agencies, e.g., IRS and SSA. Instead, we focused our review on determining the effectiveness of internal controls for processing that data and addressing inconsistencies in eligibility data when identified by the marketplace.

(Note: “Marketplace” is the bureaucratic term for an Obamacare health-insurance exchange, not an actual marketplace.)

The victims of this apparent stonewalling include those who were misled by Obamacare “navigators” into applying for subsidized coverage in the Obamacare exchanges. Remember, these people did not actually receive tax credits themselves; those were paid directly to health insurers. However, if the beneficiaries were ineligible for subsidies, the IRS will be coming after them, not their health insurers, to be paid back.

The IRS and other federal agencies have a responsibility to come clean about their part in the fiasco of Obamacare’s open enrollment. Perhaps more Congressional oversight and investigation are required.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.

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