Sunday, June 16 Is Incapable of Detecting Fraud, Secret Investigation Discovers

Republicans may have just found the single most important weakness in President Obama’s Affordable Care Act: the federal exchange plan set up on isn’t able to detect fraud in its verification process.

The Wall Street Journal reported that investigators at the Government Accountability Office created 11 fake applicants last year, in an undercover operation to test the strengths and weaknesses of the system. Each of the fake applications signed up for health coverage lacking the proper documentation; some applicants had fabricated documents, while others were missing essential documentation entirely.

The real problem took place this year when automatically re-enrolled the fake applicants, even though they still had unresolved documentation problems. Some of the fake signups were even given higher government subsidies this year, after being labeled as fraudulent applicants last year.

Six of the test applicants were flagged in the system and were notified that their “coverage” was being terminated — but according to the Government Accountability Office (GAO), five out of the six were able to have their coverage reinstated by calling the customer service center for, and Business Insider reports that “the five bogus beneficiaries who were reinstated even got their monthly subsidies bumped up a bit, although GAO [investigators] did not ask for it.”

When the secret operation ended this past April, WSJ reports, the sixth application was still pending review.

GAO auditor and investigations chief Seto Bagdoyan prepared a testimony in advance, explaining that uses a third-party processing service for document verification, and that this service “is not required to seek to detect fraud,” nor are the employees at the service “trained as fraud experts … [to] perform antifraud duties.”

With a total 10.2 million applicants currently enrolled in Obamacare, this lack of security is particularly troubling. Security experts already estimate that identity theft and fraud occur once every 42 seconds, and the unsecure platform could easily become a target for cyberhackers.

A Senate Finance Committee was organized on Thursday, July 16 in order to discuss the findings, but already several Republicans in Washington have spoken out against the negligence of the Obama administration.

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