GAO finds fraud rampant in Obamacare subsidy program

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Finding out what’s in it: A GAO report has found that the Obamacare bureaucracy gave out millions of dollars in subsidies to more than 35,000 applicants who did not qualify.

Worse, the GAO decided to test the system directly, and created twelve fake applicants whose applications had problems that should have prevented them from receiving subsidies The result?

It was able to secure $2,500 a month subsidies for 11 of those applicants. When CMS [the bureaucracy administering Obamacare] asked for documents to resolve inconsistencies in the files, GAO either sent fake documents or simply didn’t send anything. In both cases, CMS sent letters acknowledging receipt of documents and stating the matter had been resolved. Again, this was the case even when GAO had sent nothing in response to the initial CMS query. In the end, GAO was able to keep all 11 fictitious applicants on subsidies throughout 2014, each one directing about $30,000 in federal funds to an insurer under false pretenses. And it’s worth noting that, later on in the report, GAO makes clear it created this fake applicants with no prior or inside knowledge of any verification procedures that might be applied. This was something that anyone could have done.

There’s more at the link, such as the fact that the bureaucracy also decided, quite arbitrarily, to send subsidies to applicants who claimed they were not in prison, even if those applicants were on the official database of individuals in prison (and thus not qualified for subsidies according to the law).

But hey, Bernie Sanders, Hillary Clinton, and even Donald Trump want to use the government to administer health care. Trump might say he wants to get rid of Obamacare, but he also wants the government to run the system he will create to replace it. What could possibly go wrong?


  • Phill O

    Fact: 1 Manitoba had (still does) government run auto insurance. Alberta has (had ) private auto insurance. When I moved from Manitoba to Alberta in 2004 my premiums in Manitoba were $1,500:00 per year. They were $750:00 per year in Alberta. Coverage was the same: Farm use collision with glass covered, Doge Ram 2500 diesel 4X4.

    My personal opinion to why the disparity is that politicians want no waves so will let fraud abound to keep things quiet.

    Now, it can be logically argued that the farmers in Manitoba (who tend to have good driving records) were subsidizing the poor drivers in Winnipeg and the much higher crime rate in the native populated cities.

  • Wayne

    This is only the tip of the iceberg on fraud, waste, abuse, & blatant Cronyism. Not to mention the intentional redistributive effects of the whole scam. It was never about “healthcare” or even “insurance,” it’s all about Control.
    Check into the “risk corridor” aspects in the ACA (Obama-care) by which even more massive amounts of money will be transferred from government to insurance companies. “Single Payer” has always been the end-goal.
    Ask yourself why the health-insurance Industry has been a willing participant in the destruction of their own Industry– they essentially work for the Feds now & are no longer accountable to their (former) real customers.
    It’s pure Cronyism.
    Insurance companies agreed to the whole scam because they benefit in the short term & are completely captured by the State. It’s a heavily regulated business; if they don’t play-ball with the State, they don’t play-ball at all, and they know it. They accept it and they actively collude in the process.
    -Ever see the CEO of United Healthcare say “this is all socialism & doomed to fail?” Nope
    -I carefully listened to a town-hall held by Donald Jr.– he was quite clear his father “intends to manage healthcare better.”
    That’s what Progressive Rino’s do, they promise to manage the “system” “better,” not dismantle it and allow the free-market to actually work.
    Check into the whole “Obama phone” program; it started at $500 million/year & is now well over $1 Billion a year, for free cell phones. (Initially, the phones were given 30 minutes a month but that escalated to over 200 minutes a month.)
    Where does everyone think that government largess goes? It goes to the handful of Crony cell-providers who participate in the program & make a bundle doing so.

  • PeterF

    Wayne: “It goes to the handful of Crony cell-providers”

    Thats how Mr. Slim from Mexico became the wealthiest man in the world in one of the poorest countries.

  • Wayne

    –To be clear, I’m not against cell-phone providers in general, just when they do their colluding crony-deals with the State. It’s a huge gravy-train for some of them.
    -Its pure rent-seeking.
    I forget who contracts with the Feds for the free-phones but if I’m not mistaken it may be one of Slim’s American subsidiaries. This is part of the unholy alliance between the State & (crony) business.
    The Feds don’t manufacture cell-phones or maintain cell-networks, they contract with businesses who do.
    Ever look closely at your cell-bill? Mine has about $16 of nebulous “taxes” & “fees,” per month. Part of that goes directly to the free-phones. I call that forced redistribution of wealth.
    The program (it has a benign official name but we know it as “Obama-phone”) was started to allegedly allow poor people without phones, to have at least some access, and in part, so they could get jobs! (not post on Facebook.) First year budget was about $500 million & has escalated every year.
    Multiply that sort of thing across all Fed programs & IMO you have a disaster in-progress.
    For Healthcare, it’s infinitely worse. Something like 15% of the entire GDP of the economy is “healthcare,” and the Feds essentially run it all.

  • Frank

    The minute insurance companies are required to cover preexisting conditions, its no longer insurance.
    The minute insurance companies get a guaranteed government bail out, its crony capitalism
    The minute the government requires you to buy insurance and uses the IRS to enforce it, its tyranny.

  • wayne

    Excellent concise points!
    People are largely ignorant (“un-aware”) as to how insurance works in the real world.
    Personally I am not entirely opposed to a government funded back-stop for specific (and limited) high-risk pools or preexisting conditions, but before we even get to the point of even discussing that, I want to see the health insurance companies FULLY exposed to free-market pressures & the Feds disengage entirely
    That being said, we’ve been fed complete lies about how many people didn’t or don’t, have health insurance at any given time, as well as the number of people with preexisting conditions that would totally exclude them completely from the market.

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