The agency charged with overseeing implementation of the Affordable Care Act could not guarantee that tax credits under the law went solely to Obamacare enrollees who had paid their premiums, government inspectors discovered.
A report released Wednesday said that in 2014, the Centers for Medicare and Medicaid Services relied on health insurers to confirm that payments based on the tax credits were accurately doled out without an independent system to verify or audit the determinations.
The inspector general for the Department of Health and Human Services, the parent agency, concluded that “federal funds may be at risk” without an effective system to ensure that the payments to confirmed Obamacare enrollees were correct.
The Affordable Care Act provides the tax credits to help low-income enrollees pay their monthly premiums. In 2014, insurers managed nearly $11 billion in tax credits, according to a Treasury Department report.
Instead of conducting its own analysis, the Centers for Medicare and Medicaid Services depended on insurers to determine how much money the agency should give to the health care companies in tax credits, causing “a risk that funds were authorized for payment” in incorrect amounts, the audit found.
Ed Haislmaier, a senior research fellow in health policy studies at The Heritage Foundation, said it was unlikely that insurers deliberately committed fraud. The error may have been a fault of the Obamacare enrollment website, he said.
While the Centers for Medicare and Medicaid Services largely fixed the front end of the website so that it looks functional to consumers, Haislmaier said, the Obama administration “jury-rigged” the back end in 2014 and is still working to build out the rest of it. He said:
It’s like a movie set where you have the façade of a building propped up in the back by 2-by-4s, but when the person walks to the door there’s no real room back there because the rest of the building hasn’t been built—that’s what’s going on.
The Obama administration is replacing the enrollment system with an automated, policy-based payment process this month, which the report said should rectify some of the issues.
But Haislmaier said that until the “half-built” website is completed and fully functional, errors will continue to occur.
He said the government likely will continue to give consumers incorrect information on tax credit qualifications and payments.