Antifraud task force closes 750K improper Obamacare accounts

The Department of Health and Human Services has ended Affordable Care Act enrollment for more than 750,000 individuals who do not meet eligibility criteria. Vice President J.D. Vance announced the enforcement on Tuesday, saying the move would save taxpayers an estimated $2.2 billion.

The vice president said health officials would additionally verify some other 419,000 individuals enrolled in Obamacare to ensure legal residency and eligibility status. Officials did not break down those numbers. But they said that the suspect accounts represented individuals with income exceeding the program threshold, those already enrolled in private health insurance, and others who did not provide social security numbers.

Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid, known as CMS, said the Affordable Care Act gave low-income Americans a path from Medicaid to private health insurance. However, misguided enrollment incentives and lax enforcement have allowed grifters to bilk the system. About 34% of the 23.1 million enrollees in ACA-qualified health plans have never filed claims, indicating the possibility of fraud, Oz added. He said many of the enrollments targeted Tuesday were ghost accounts—created by brokers who signed up people without their knowledge, or fabricated false identities, just to earn federal payments.

Dr. Oz highlighted the case of Cory Lloyd, sentenced in February to 20 years in prison for hustling homeless and jobless people into signing up for Obamacare, and then pocketing commissions from insurance companies. But the Anti-Fraud Task Force did not announce any new legal charges on Tuesday.

How did the task force identify the improper accounts? Federal Trade Commission Chairman Andrew Ferguson said the task force used machine learning to identify patterns in ACA enrollment data, and then attempted to contact individuals whose accounts did not meet the program’s eligibility criteria. He said if their eligibility could not be verified, the individuals were kicked off their plans.

How will they prevent future fraud? CMS said it would require existing insurance agents to reidentify themselves using federal tools and ensure applications included social security numbers, or immigration document numbers, before approving them.

Dig deeper: Listen to Carolina Lumetta’s report on the Republican debate over Obamacare reform last year.