California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

GAO Finds Federal Gov’t Paid for Duplicate Coverage Under ACA

The federal government paid for duplicate coverage and an excessive share of medical costs for some U.S. residents because of errors related to eligibility decisions under the Affordable Care Act, the New York Times reports.

Report Findings

According to a Government Accountability Office report released Thursday, some individuals received subsidies to help them purchase exchange coverage while they were also enrolled in Medicaid.  According to Carolyn Yocom, a director of health care studies at GAO, the duplicate coverage could mean the federal government is "paying twice -- subsidizing exchange coverage and reimbursing states for Medicaid spending -- for individuals enrolled in both types of coverage."

The House is expected to hold a hearing on the issue on Friday (Pear, New York Times, 10/22).

The report noted that an estimated seven million U.S. residents have changing incomes that likely qualify them for Medicaid at some times and for the ACA's subsidies at others. According to the report, it is difficult for the federal government to differentiate between the eligibility groups (Howell, Washington Times, 10/22). Further, the report noted that CMS "does not have procedures to automatically terminate subsidized exchange coverage when individuals are determined eligible for Medicaid."

In addition, it is difficult for the government to identify if U.S. residents are newly eligible for Medicaid under the ACA's expansion or if they qualify for traditional coverage, according to the report.

The federal government currently pays 100% of Medicaid costs for beneficiaries who qualify for the program under the expansion, while it pays an average of about 57% of the costs for beneficiaries who qualify for traditional coverage (New York Times, 10/22).

In prepared testimony, Yocum stated, "CMS cannot identify erroneous expenditures due to incorrect eligibility determinations, which also limits its ability to ensure that state expenditures are appropriately matched with federal funds" (Washington Times, 10/22).

GAO also found that states' erroneous Medicaid eligibility decisions led to the "enrollment of individuals with incomes exceeding Medicaid standards." According to the report, the errors meant the federal government paid for a higher share of Medicaid beneficiaries' costs than it was required (New York Times, 10/22).

Further, the report noted that electronic records were sometimes out-of-date, which meant individuals' eligibility transitions between Medicaid and the subsidies were not always reflected in real time. The issue could cause some individuals to experiences gaps in coverage, according to GAO (Washington Times, 10/22).

GAO Successfully Enrolled Fake U.S. Residents in Separate Investigation

In addition, GAO said that in a separate investigation the agency successfully acquired Medicaid coverage and ACA subsidies for fake U.S. residents, the New York Times reports.

For the investigation, GAO created 18 fictitious identities and filed applications for Medicaid coverage and ACA subsidies. According to GAO, federal and state officials approved the subsidies or Medicaid coverage for 17 of the fake applicants, despite the applicants having:

  • Fabricated birth certificates;
  • Invalid immigration document numbers;
  • Nonexistent Social Security numbers; and
  • Other counterfeit documents.

Seto Bagdoyan, director of GAO's forensic audits and investigative service, said, "Our undercover testing for the 2015 coverage year found that the health care marketplace eligibility determination and enrollment process remains vulnerable to fraud" (New York Times, 10/22). Officials screen only for documents that appear as if they were altered. Bagdoyan said, "Thus, if the documentation submitted does not show such signs, it would not be questioned for authenticity" (Washington Times, 10/22).

Bagodoyan said while the results "cannot be generalized to the full population of enrollees," they raise a red flag (New York Times, 10/22).


HHS said it "remain[s] disappointed" with GAO for not disclosing how it infiltrated HHS' system (Washington Times, 10/22). According to HHS spokesperson Meaghan Smith, HHS' online verification system had blocked GAO's initial enrollment attempts (New York Times, 10/22).

In addition, HHS noted that because ACA subsidies are paid directly to insurers, enrollees cannot directly profit from erroneously obtaining them. Further, Smith said consumers must confirm the information they provide is accurate under penalty of perjury. She noted, "It's important to consider whether it's likely that uninsured Americans would replicate the next actions the GAO took, namely knowingly and willfully providing false information in violation of federal law, which could subject the individual to up to a $250,000 fine." She added, "It seems unlikely that many uninsured Americans, many of whom have less than $100 in savings, would choose to commit perjury in order to pay the premiums and deductibles for two insurance policies or to pay premiums for marketplace insurance when eligible for Medicaid" (Washington Times, 10/22).

Meanwhile, GAO noted that federal officials said they would "look at the risk associated with multiple coverage."

The Obama administration also said it was boosting efforts to "prevent duplicate coverage" errors and that it had provided "significant training and guidance" to ensure that states properly identify Medicaid beneficiaries who are eligible for the program under the ACA's expansions (New York Times, 10/22).

This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.