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Obamacare’s Implementation Poses Grave, But Largely Unknown Risks For Beneficiaries

By Dan Epstein        September 30, 2013

Many of us are concerned and anxious because we don’t know what the Patient Protection and Affordable Care Act (ACA), also known as Obamacare, will mean for our personal health care, our families and our pocketbooks as enrollment commences October 1.  The American people are likely unaware of the risks they face in disclosing their personal medical and financial information to strangers through the enrollment programs and have not been well informed of the potential for state entities to violate federal laws during the implementation of the ACA.

In an aggressive effort to recruit Americans into the ACA, the federal government has implemented “Navigator” and “Assister” programs.  These programs lack not just training and oversight, but also background checks, fingerprinting or other screening that should be required prior to obtaining Americans’ social security numbers, addresses, and personal medical information.  Recognizing these security concerns, thirteen Attorneys General wrote to U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius on August 14, 2013 warning that “…this is a privacy disaster waiting to happen.”  On September 18, 2013, the House Oversight and Government Reform Committee issued a troubling report detailing how navigators and assisters not only threaten to harm consumer privacy and misuse consumer data but are also being carried out by individuals who have not been subject to background checks or other certifications.  Concerned about the potential liabilities associated with these navigator and assister programs, entities in Ohio, Florida, Oklahoma, Pennsylvania, Utah and West Virginia have already voluntarily returned federal navigator grant money.

But another area of concern that has not yet received much attention is the risk of waste, fraud and abuse of the hundreds of millions of taxpayer dollars states are receiving to run their exchanges or marketplaces.  For example, California has received $910 million; New York, $369 million; and Hawaii, $205 million.  And this is just the beginning.  Additional funds will likely be pumped into the system if the navigators and assisters are unable to meet their enrollment “quotas.”   Entities within states should be on high alert regarding their risk of violating laws as implementation of the ACA occurs.  For example, using any false writings or documents known to be materially fictitious, concealing a material fact, or making any fraudulent or fictitious statements to a government representative about the use of grant funds are violations of 18 U.S.C. § 1001.  Further, under OMB Circular A-87, state and local entities that receive federal funding are required to adequately document all costs associated with administering the grant funds. If a recipient falsely certifies that they are conforming to this regulation, or if they do not properly document federal grant funds that are being primarily utilized for state programs, they may be subject to liability under both the OMB Circular A-87 and the False Claims Act. An Inspector General found that the IRS largely failed to account for and report these costs associated with implementing ACA. If our federal agencies are failing at this oversight, it follows that states cannot be adequately equipped, aware, or prepared to conduct oversight over implementation of the ACA, setting these state exchanges up for failure.

Cause of Action (CoA) is concerned about the potential for waste, fraud and abuse of these funds given to state entities.  This is why we have sent liability alert letters to more than 35 Governors thus far, and the District of Columbia, alerting them to the risks involved with the unintended misuse and waste of the ACA grant funds.  Given the hundreds of millions of federal taxpayer dollars at stake, taxpayers should hold their elected representatives accountable for how their money is being spent.

The grim reality is that the Affordable Care Act is deceptively complex and non-transparent.  Americans need to be cautious about enrolling in Obamacare (i.e., providing personal, medical and financial information to unchecked strangers), and mindful of the potential for misuse of taxpayer funds given the myriad, untested liability pitfalls and the vast sums of taxpayer money at stake.  At a minimum, the American people deserve to have our elected representatives and federal government provide proper oversight of the implementation of the Affordable Care Act.

 

Dan Epstein is the executive director of Cause of Action, a non-profit, nonpartisan government accountability organization.

 

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