Obamacare Is a Fraudster’s Paradise

Ever wonder why government programs are so rife with waste, fraud and abuse? Consider what’s been happening with the Affordable Care Act.

The administration recently announced that was reducing by 50 percent — from 30 hours down to 20 — the required training for the law’s navigators, individuals paid to help Americans enroll in the health care act’s new entitlements.

The administration has thrown numerous other requirements overboard in its drive to get the law’s exchanges up and running by Oct. 1. Unfortunately, many of the requirements being jettisoned were designed to ensure taxpayer dollars are spent properly.

As a result, the law is shaping up as a fraudster’s paradise — a potential “Wild West” where individual citizens and taxpayers as a whole can easily get scammed.

Take the administration’s decision to put Americans on the “honor system” when it comes to qualifying for exchange subsidies next year. That decision will have two significant effects.

The law says that only individuals who lack access to “affordable” coverage through their employers should qualify for the subsidies. But in reality, the administration will have to take applicant’s claims at face value, because they won’t be able verify their accuracy. As the Associated Press noted, “a scofflaw could lie, and there’s no easy way to check” — a great recipe for fraud.

Second, the administration will conduct limited checks of applicants’ income, giving individuals a strong incentive to under-report their earnings on their application, to receive the maximum possible insurance subsidy. Individuals can lowball their income numbers on the application, and receive thousands — even tens of thousands — of dollars in taxpayer-funded insurance subsidies. While those who receive subsidies improperly will have to pay some of the subsidies back, in many cases individuals can receive much more in improper subsidies than Obamacare ever requires them to repay.

You might think that the federal government itself, or its contractors creating the exchanges, would have the tools to protect taxpayer dollars from being abused through these loopholes. But the contractor that just won a multi-year contract valued at up to $1 billion to verify exchange applicants’ claims was just placed under investigation in Britain for over-billing the British government to the tune of tens of millions of pounds.

In addition to fraud against the federal government, the health-care law could also lead to a rise in fraud against individual Americans. The training program prescribed by the government does not require anti-fraud training for navigators. It also does not require “minimum eligibility criteria and background checks” for those participating in the program.

The lack of background checks means scam artists could easily use the navigator program to prey on vulnerable individuals. Even California’s insurance commissioner — a strong supporter of the law — said, “We can have a real disaster on our hands” when it comes to navigators.

More than three years ago, Nancy Pelosi famously claimed that we had to pass the law to find out what’s in it. Over the past several months, we have seen a series of announcements and policies that show why it could be a fraudster’s dream — and a nightmare for the American taxpayers who will pay the bill for con artists’ scams.

This post was originally published in McClatchy.

Obamacare Exchange Contractor Target of Major Fraud Investigation

Last week, The New York Times reported that the Obama Administration over the Independence Day holiday quietly awarded “a contract worth as much as $1.2 billion” to Serco, a British company, to help develop the federal insurance exchange. Now comes word from London that Serco is one of two companies under investigation by British authorities for overbilling government contracts.

Britain’s Lord Chancellor, Chris Grayling, made a statement in Parliament on Thursday about a “wholly indefensible and unacceptable state of affairs” and indicated that the over-charges may have begun nearly 15 years ago:

The audit team is at present confirming its calculations, but the current estimate is that the sums involved are significant and run into the low tens of millions of pounds in total, for both companies, since the contracts commenced in 2005. The audit shows that the overcharging began at least as far back as the commencement of the current electronic monitoring contracts in 2005. It might even date back as far as the previous contracts let in 1999.

Even as the integrity of Serco’s contracting work has come into question in Britain, the Obama Administration could pay Serco billions to verify the integrity of individuals’ exchange applications. As the Times reported:

Serco will help the Obama administration and states determine who is eligible for insurance subsidies, in the form of tax credits, and who might qualify for Medicaid….Serco will also help the administration decide who is entitled to exemptions from the tax penalties that can be imposed on people who go without health insurance starting next year.

This billion-dollar contract represents a glaring contradiction in terms—a company under investigation for inaccurate, and potentially fraudulent, bills in Britain being asked to verify the accuracy of Americans’ applications for federal exchange subsidies. Particularly given that the Administration also announced it will rely on the “honor system” for individuals to self-report income to the exchanges next year, this development raises even more concerns about the potential for rampant fraud in Obamacare programs.

More broadly, the events in London also raise questions about why federal taxpayers should be asked to give more than $1 billion to a contractor at the center of a major investigation. Of course, Congress can—and should—put a stop to these machinations by refusing to spend a single dime on Obamacare.

This post was originally published at The Daily Signal.