In plan year 2015, 14 states, including the District of Columbia, operated  their own state-based marketplaces. Finally,  marketplaces are required to perform periodic examinations of data  sources to identify changes to applicant information, such as an  applicant’s death. Selected States’ Key Processes Used Multiple Data Sources to Verify Applicant Eligibility, and CMS Relied on Several Methods to Oversee the States’ Efforts

		Key Processes Used Federal and State Data Sources to Verify Applicant Eligibility

Each of the selected state-based marketplaces’ key processes to verify  applicant eligibility for subsidized coverage used various electronic data  sources in plan year 2015. PPACA requires marketplaces to verify  applicant eligibility using data sources and methods approved by HHS. As noted above, the selected state-based marketplaces had  access to local data sources, some of which may have been more current  than the data sources used by the data hub. For example, all three  selected state-based marketplaces supplemented federal tax income  information obtained through the data hub with more-current state wage  information to verify income for subsidy eligibility. For example, CMS conducted annual  reviews, collected programmatic data, and engaged in regular  communication with the selected state-based marketplaces. Few Indications of Potentially Improper or Fraudulent Enrollments Were Identified in Selected States in Plan Year 2015

Our analysis of plan year 2015 eligibility and enrollment data from three  selected states identified few indications of potentially improper or  fraudulent enrollments. State-based marketplace officials cited inherent challenges with  verifying SSN information. We also found instances in which the SSNs contained likely data- entry errors in two of our three selected state-based marketplaces. We identified 21 of the almost  210,000 applicants (approximately 0.01 percent) who were deceased  prior to starting coverage in plan year 2015. The majority of these  applicants died after their applications were submitted, but prior to  starting coverage. We also reviewed 11 applicant cases of these 30 applicants and  found data-entry errors. In Rhode Island and Maryland,  almost 3,000 applicants—about 2.4 percent of 123,000 applicants  from these states—did not resolve their immigration-related data- matching inconsistencies. As previously discussed, these two  state-based marketplaces had manual inconsistency-resolution  processes in place during plan year 2015 and may not have  terminated coverage for these applicants in a timely manner. Appendix I: Objectives, Scope, and Methodology

The objectives of this review were to (1) identify key processes used by  selected state-based marketplaces to verify applicants’ eligibility for  subsidized qualified health plans in plan year 2015, and how the Centers  for Medicare & Medicaid Services (CMS) oversaw such efforts; and (2)  assess the extent to which applicant eligibility and enrollment data from  selected state-based marketplaces show indications of potentially  improper or fraudulent enrollments in subsidized qualified health plans in  plan year 2015. To identify key processes used by selected state-based marketplaces to  verify applicants’ eligibility and to determine how CMS oversaw such  efforts, we reviewed relevant federal and state statutes, Department of  Health and Human Services (HHS) regulations, state policies and  procedure manuals, and CMS documentation, such as annual reports  submitted by the state marketplaces and report-review templates, data- metric templates, and review agendas. Internal Revenue Service household-income information in  the data hub can be up to 2 years old. Specifically, we grouped the  states’ eligibility and enrollment data using the following characteristics:  condition 1 applicants with personal information that did not match SSA’s  records and had SSN-related inconsistencies; condition 2 applicants with  personal information that did not match SSA’s records and did not have  SSN-related inconsistencies; condition 3 applicants whose SSNs and  names or dates of birth matched potentially deceased individuals;  condition 4 applicants whose SSNs matched potentially deceased  individuals but whose names or dates of birth did not; condition 5  applicants who self-attested to being noncitizens or were identified by the  state as having a potential immigration-related inconsistency; and  condition 6 applicants who were identified by the state as being  potentially incarcerated. Patient Protection and Affordable Care Act: Observations on 18  Undercover Tests of Enrollment Controls for Health-Care Coverage and  Consumer Subsidies Provided under the Act.
Why GAO Did This Study

PPACA offers subsidized health-care coverage for qualifying applicants, and states may elect to operate their own health-care marketplaces to assist consumers in comparing and selecting insurance plans offered by private issuers. In plan year 2015, 14 states, including the District of Columbia, operated their own marketplaces and determined eligibility and enrollment. CMS is responsible for oversight of these marketplaces. GAO was asked to examine PPACA enrollment controls for state-based marketplaces. This report, for plan year 2015, (1) identifies key processes used by selected state-based marketplaces to verify applicants' eligibility for subsidized qualified health plans, and how CMS oversaw such efforts; and (2) assesses the extent to which applicant eligibility and enrollment data from selected states show indications of potentially improper or fraudulent enrollments in subsidized qualified health plans.
GAO selected three state-based marketplaces for review—Idaho, Maryland, and Rhode Island—based on factors such as geographic distribution and enrollment size. GAO reviewed relevant documentation and interviewed CMS and state officials. GAO analyzed the selected state-based marketplaces' eligibility and enrollment data for plan year 2015 and matched these data to external data sources to identify indications of potentially improper or fraudulent enrollments, and reviewed an illustrative selection of applicants' information. The results are not generalizable to other marketplaces. GAO is not making any recommendations.

What GAO Found

For plan year 2015, GAO reviewed three selected state-based marketplaces' key processes to verify applicant eligibility for subsidized coverage and found that they used various data sources. Under the Patient Protection and Affordable Care Act (PPACA), marketplaces are required to verify applicant eligibility using data sources and methods approved by the Department of Health and Human Services (HHS). Applicant information that must be verified or validated to receive subsidized coverage includes Social Security number (SSN), citizenship or lawful presence, and income. To accomplish this verification, the selected state-based marketplaces relied on various federal data sources, including sources accessed via the federal data services hub (data hub). They also used state data sources, some of which may have been more current than the data hub sources. For example, all three selected state-based marketplaces supplemented federal tax income information accessed through the data hub, which can be up to 2 years old, with more-current state wage information to verify income. HHS's Centers for Medicare & Medicaid Services (CMS) oversaw the state-based marketplaces' verification procedures by conducting annual reviews, collecting enrollment metrics, and engaging in regular communication in plan year 2015.
For the three selected states, GAO found few indications of potentially improper or fraudulent enrollments for plan year 2015 in the verification processes reviewed, but did identify data-quality issues, such as data-entry errors or name changes.
About 2,000 of approximately 210,000 applicants (about 1 percent) had SSNs, names, or dates of birth that did not match the Social Security Administration's records. State officials cited inherent challenges with verifying SSN information, such as name changes. GAO also found instances in which SSNs contained likely data-entry errors.
Twenty-one of approximately 210,000 applicants (about 0.01 percent) were reportedly deceased prior to starting coverage. The majority of these applicants died after their application was submitted, but prior to starting coverage.
About 3,000 of approximately 123,000 applicants in two states (about 2 percent) did not resolve immigration-related inconsistencies. Inconsistencies occur when an applicant's information does not match information contained in the data source used to verify the information. The two states had manual inconsistency-resolution processes for plan year 2015 and may not have terminated coverage for these applicants in a timely manner. Officials from both states said they have since implemented or plan to implement changes to automatically close expired inconsistencies and terminate coverage, as appropriate.