HHS OIG Report on Aliens and Obamacare: Important but Incomplete

By Dan Cadman on August 19, 2014

I have been reading a June report issued by the Office of Inspector General (OIG) at the Department of Health and Human Services (HHS) called "Marketplace Faced Early Challenges Resolving Inconsistencies with Applicant Data".

The report provides the findings from an examination of the start-up enrollment data from the automated sites (data hubs, or "marketplaces") run by the federal and state governments that receive and store requests for medical insurance under the Patient Protection and Affordable Care Act (ACA), commonly known as Obamacare. Under the law, states may choose to run their own or not; in the latter case applicants use the federal marketplace.

Most Americans are by now aware of the technical glitches, failures, and bobbles that attended marketplace start-ups — most particularly the federal exchange, which is significant because only 14 states and the District of Columbia run their own marketplaces. (Another seven engage in a joint venture with the federal government, leaving the federal government bearing the greatest share of the burden.)

The law establishing Obamacare provides that aliens illegally in the United States are ineligible for medical insurance. This makes sense in that the insurance may be subsidized through tax credits, and few illegal aliens pay their taxes. Applicants must self-attest to their citizenship and immigration status through the marketplace, which attestation is subject to confirmation in various ways.

The enrollment data examined was limited to a single three-month period of the start-up, October through December 2013 (the first quarter of the 2014 federal fiscal year). The report found that:

[T]he Federal marketplace was unable to resolve about 2.6 million of 2.9 million inconsistencies because the CMS eligibility system was not fully operational. It was unable to resolve inconsistencies even if applicants submitted appropriate documentation. These inconsistencies pertained to citizenship, national status, and lawful presence; income; and employer-sponsored minimum essential coverage.

As the HHS OIG points out, that unresolved rate equates to 89 percent of all inconsistencies. What's more, citizenship and immigration status issues represented 1,295,571 (44 percent) of the discrepancies — far and away the largest single self-attestation discrepancy.

For cynics like me, this makes for interesting, but in many ways unsurprising, reading. Aliens illegally in the country are accustomed to routinely lying about their identities and providing false documents for any number of reasons, often (but by no means exclusively) to obtain unauthorized employment. Why would they not give the marketplace a try? It means access to health care through subsidized insurance, with no downside whatever if you get away with it. And if you don't, it's not like there's a policeman or immigration officer lurking to snap you up and levy criminal or deportation consequences for the lies you tell.

Concerning as it may be that immigration status constitutes such a large share of discrepancies, and that nearly 90 percent of those discrepancies were not resolved, at least in the first fiscal quarter of the marketplace start-up, this is not, I would submit, the worst aspect of the problem. Considered practically, what this means is that there will be great pressure on marketplace administrators at both the federal and state levels to resolve discrepancies, but particularly citizenship and immigration discrepancies since, as the OIG tells us, initial "unresolved" grants of eligibility may not be extended when lawful status is the cause of the discrepancy.

And it seems that there will be no natural constituency among those administrators to resolve such discrepancies through denial. Certainly if we look at a parallel example of the administration of immigration benefits at U.S. Citizenship & Immigration Services, there has been great pressure placed on examiners to grant, grant, grant. There is no place in this administration for denial-minded, or even fair-minded, adjudicators. What is more, high denial rates would give aid and comfort to those in political positions, and even among a skeptical public, who have questioned the premises of Obamacare, or of our federal and state governments' ability to competently handle this massive new program.

In this regard, it is instructive to consider what the HHS OIG had to say about state exchanges' handling of discrepancies: "The abilities of state marketplaces to resolve inconsistencies varied. Four state marketplaces reported that they were unable to resolve inconsistencies, seven reported that they resolved inconsistencies without delay, one reported that it resolved only some inconsistencies, and three reported that their State Medicaid offices resolved inconsistencies. We also found that data on inconsistencies are limited."

The report goes on to say, "The remaining seven State marketplaces (Connecticut, the District of Columbia, Kentucky, Maryland, New York, Rhode Island, and Washington State) reported that they resolved inconsistencies without delay. Staff from these marketplaces reported that the process ran smoothly with minimal problems. However, one marketplace official noted that verifying lawful presence can be difficult because applicants can supply a wide variety of documents to resolve that inconsistency. That official reported that this did not prevent the marketplace from resolving the inconsistency."

And it is that last sentence that deeply disturbs me. Where the HHS OIG missed the boat on this analysis is that, despite field visits to the federal marketplace and all 15 state marketplaces, the auditors made no attempt whatever to pull a representative sample of the resolved-and-approved inconsistencies and, working with the Department of Homeland Security (DHS) OIG, compare them against actual DHS records to see if the reconciliations were accurate.

How many of those reconciliations may have been wrong, or based on identity theft and fraud perpetrated by illegal aliens? We don't know. Perhaps no one wants us to know.

Topics: Health Care