Some consumers who got health coverage or subsidies through HealthCare.gov might not have been eligible to receive them last year because of deficiencies in the federal exchange’s internal controls, according to a government report likely to further stoke Republican criticism.
Not all the internal controls were effective in determining if applicants were properly eligible for health insurance or subsidies, the Health and Human Services’ Office of Inspector General concluded in a report released Monday. It also found problems resolving inconsistencies between some applicants’ information and federal data.
The Centers for Medicare and Medicaid Services, which implements the health law, said the report examined the first open enrollment period in 2014. The agency said it was aware of the majority of the technology issues during those early days and corrected them prior to the inspector general’s report.
The report, based on audits and a review of two different samples of 45 applicants, doesn’t necessarily mean the exchange improperly enrolled applicants or incorrectly calculated subsidies, according to the study. But the report notes that without properly verifying eligibility and resolving inconsistencies, the federal exchange couldn’t ensure that applicants met requirements for subsidies or that subsidies were the right amount.
The report reviewed internal controls that were in place from Jan. 1, 2014 through March 31, 2014, and special enrollment periods in April of last year.
CMS said in comments attached to the report that it agreed with the OIG’s recommendations and has taken or will undertake steps to improve the vetting process. The agency said it had fixed issues relating to applicant eligibility, for example. The agency said it “works continuously” to provide accurately eligibility determinations.
“As with any technology project, part of CMS’s continuous effort involves making regular updates to the system to resolve issues that are identified,” Andrew Slavitt, acting administrator of CMS, said in the letter.
The findings come on the heels of a July report by the Government Accountability Office, a congressional watchdog agency, that found 11 fictitious applications submitted in an undercover operation were able to maintain coverage and re-enroll in 2015 on the federal exchange. Republicans denounced HealthCare.gov’s performance after the July report, and the Senate Finance Committee held a hearing on the matter.
A total of 7.3 million signed up and paid for coverage in nearly three dozen states that use the federal exchange as of the end of March.
CMS said that this plan year, the agency has 90 days to adjust tax credits and cost sharing reductions, as applicable, for individuals if they don’t provide sufficient supporting documentation. They have 95 days to terminate enrollment if documents aren’t provided on citizenship and immigration.
In the study of enrollment data from early 2014, the inspector general found that applicants’ Social Security numbers weren’t always validated and that citizenship, family size and household income wasn’t always verified.
Meaghan Smith, a CMS spokeswoman, said multiple safeguards are used to verify eligibility, resulting in the termination of coverage for about 226,000 individuals as of the end of March 2015 who failed to properly verify their citizenship or immigration status. She also said that tax credits were adjusted for hundreds of thousands of others whose income couldn’t be sufficiently verified.
CMS pointed out that enrollees don’t receive a direct monetary benefit from the program, so there is a low incentive for fraud. Instead, insurance companies receive payments on behalf of consumers, allowing them to buy discounted health coverage.
To be eligible for health coverage under the health law’s exchanges, applicants must be a U.S. citizen, a U.S. national, or legally present in the U.S. They also can’t be incarcerated and must meet residency standards. The exchange must also verify other aspects of consumers’ applications, including annual household income and family size.
Applicants provide basic personal information that the exchange verifies using a data hub that connects to databases at the Social Security Administration, the Internal Revenue Service, and other federal agencies. Inconsistencies occur when the data doesn’t match what the applicant has provided. Applicants can obtain coverage and cost-sharing programs during the period when the exchange is trying to resolve an inconsistency.
The report found some internal controls were effective, such as those that identify if an applicant is incarcerated and thus ineligible to use the federal exchange. But it found the exchange didn’t always keep complete, accurate and up-to-date data on applicants in the eligibility and enrollment system.
In one example, the exchange had an applicant who had inconsistent information about household income. But instead of providing income evidence, the applicant provided a copy of a naturalization certificate. Despite the disparity, the exchange considered it a “good faith” effort to provide documentation and allowed the applicant to maintain health insurance and cost-sharing reductions for the 2014 coverage period.