OIG Reports Find Health Insurance Exchange Data Inconsistencies

July 2, 2014 in News

The federal health insurance exchange failed to properly verify individuals’ data that determined their eligibility for coverage and subsidies to help offset premiums costs, according to two reports released Tuesday by HHS Office of Inspector General, the AP/ABC News reports.


The reports were requested by Republican lawmakers as part of a budget deal that ended a federal government shutdown last fall (Alonso-Zaldivar, AP/ABC News, 7/1).

Last month, the Obama administration began notifying hundreds of thousands of people who acquired subsidized coverage through the insurance exchanges to verify their eligibility or risk having to pay back some of those funds next year or lose their coverage altogether.

The notices came less than a month after CMS reported that coverage applications from about one in four enrollees, or slightly more than two million people, had discrepancies with federal records. Those applications included roughly 1.2 million people who filed applications with inconsistent information about their annual income (iHealthBeat, 6/5).

Report Findings

The HHS OIG reports, which were based on research conducted between October and December 2013, found that consumers submitted key personal details that did not match federal government records, the most common of which involved:

In addition, the reports found:

  • The federal exchange had 2.9 million consumer data inconsistencies from Oct. 1, 2013, to Feb. 23, 2014;
  • The majority of data discrepancies involved enrollees’ income and citizenship statuses;
  • The federal exchange’s eligibility system was “not fully operational” early on, resulting in cases that could be closed but were not;
  • The federal exchange did not verify all applicants’ Social Security numbers through the Social Security Administration, as mandated by its own internal safeguards;
  • Some state exchanges also failed to correctly verify consumers’ eligibility data; and
  • States working to fix discrepancies have done so with mixed success (AP/Sacramento Bee, 7/2).

Overall, HHS OIG concluded that the federal exchange does not have the safeguards needed “to prevent the use of inaccurate or fraudulent information when determining eligibility” (Pear, New York Times, 7/1).

Still, the reports noted, “Inconsistencies do not necessarily indicate that an applicant provided inaccurate information … or is receiving financial assistance through insurance affordability programs inappropriately” (AP/Sacramento Bee, 7/2).

According to the reports, the federal government has yet to resolve 90% of the 2.9 million discrepancies (Demko, Modern Healthcare, 7/1).

Efforts To Address Issue

The reports noted that the federal government faces a significant challenge in reconciling all the inconsistencies. OIG added that federal and state governments’ efforts to resolve the data conflicts are complicated by remaining computer issues, such as outages in the federal data hub used to verify consumer information.

CMS spokesperson Aaron Albright said that more than 425,000 of the discrepancies have been resolved, more than 90% of which have benefitted the enrollee. According to the AP/Bee, the federal government is hoping to resolve the remaining cases this summer, but might have to use an extension permitted under the law.

In addition, the reports called on the federal government to publicly detail how and by what date it would have the issues resolved (AP/Sacramento Bee, 7/2). The reports also suggested that HHS increase its scrutiny of state exchanges to ensure they are resolving data conflicts in a timely manner (Modern Healthcare, 7/1).


CMS Administrator Marilyn Tavenner said she was not surprised by the findings. She added that the Obama administration agrees with the reports’ recommendations and is constructing a plan to resolve the discrepancies (AP/Sacramento Bee, 7/2).

In addition, Tavenner noted that so far, “there has been no evidence of an applicant defrauding the federally facilitated marketplace or a state-based marketplace in order to unlawfully enroll in a qualified health plan or take advantage” of subsidies.

Meanwhile, Republican lawmakers cited the findings as proof that the administration moved forward with awarding subsidies before it could accurately verify eligibility.

Rep. Diane Black (R-Tenn.) said, “The administration moved forward with implementation despite repeated warnings that the systems were not ready” (New York Times, 7/1).

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