The Obama Administration is turning a blind eye to ObamaCare cheats and has fraudulently paid nearly two billion in subsidies to customers who never deserved them, according to a report.

When the federal government rushes to pass and implement a mammoth new entitlement program without first ensuring that verification processes are in place, it opens the door to fraud.

The Government Accountability Office (GAO) just released a report that found the Administration gave $1.7 billion in subsidies to 431,000 applicants who had unresolved inconsistencies with their applications as of April 2015 after their coverage year had ended. Another 35,000 applicants with unresolved questions involving Social Security numbers received $154 million in subsidies for insurance premiums. Finally, about 22,000 customers who may have been serving a prison sentence, received $68 million in subsidies (prisoners do not qualify for subsidies).

According to the report, the Centers for Medicare and Medicaid Services (CMS) took a “passive” approach to identifying and preventing fraud. The agency failed to implement an effective process to resolve inconsistencies in customer applications making it possible for ineligible customers to get away with those subsidies.

Furthermore, the CMS hadn’t taken any steps to end or adjust the subsidies for people with application inconsistencies. Nor has CMS shown urgency or a plan to fix the critical errors or conduct an assessment to identify where the vulnerabilities in the system are.

A key finding of the report is that Administration failed to aggregate, track, and analyze results from the “data services hub,” the electronic system that taps federal agencies such as Social Security, the IRS, and Homeland Security to verify an applicant’s personal details. Instead, they just used the information provided by individuals to process applications.

Fox News reports:

The report is being released by Republicans on the House Energy and Commerce Committee in connection with a hearing on the Department of Health and Human Services budget. A copy was provided to The Associated Press.

GAO "raises many red flags," said committee chairman Rep. Fred Upton, R-Mich. "Perhaps the most unsettling is that while HHS agrees there are many vulnerabilities, the agency has no urgency or plan to fix these critical errors."

Its investigators approached the individual agencies assigned to verify personal information and found large numbers of inquiries in which the data hub could not confirm details.

For example, for the 2014 coverage year Social Security could not verify citizenship for about 8.2 million inquiries in which the applicants claimed they were citizens, the report said. (For 2015, that number was down by more than half, to 3.6 million.)
At IRS, income and family size information — critical for health insurance subsidies — was not available for inquiries representing 30.7 million people in 2014. GAO said the number hadn't changed much for 2015. It was down to 29.2 million.

The Department of Health and Human Services (HHS) agreed with the GAO’s recommendations and claims that they have been working on improving processes since 2014, but the GAO report contradicts that claim.

ObamaCare runs on the honor code as is permitted to approve applications that have unresolved issues and gives customers a few months to straighten out their paperwork. In the meantime, people are allowed to take advantage of benefits they shouldn’t receive and we taxpayers foot the bill.

As with other entitlement programs such as food stamps and welfare, the Obama Administration has made headcounts a priority over eligibility. They would rather flood the system with subsidies rather than targeting help to those who truly need them.