The Obama administration improperly paid out $434 million to Obamacare customers to pay down the cost of insurance in 2014, the first year the law’s health insurance marketplaces went online, the Washington Times reported.
The Health and Human Services’ Office of the Inspector General (OIG) released a report Monday that outlined the improper payments during Obamacare’s first year.
In a review of 140 health insurance policies sold in 2014, the inspector general found that Centers for Medicare & Medicaid Services (CMS) wrongly paid out financial assistance payments for 26 policies.
CMS authorized possibly improper financial assistance in five policies to insurers that didn’t provide the right documentation.
“CMS didn’t have an effective process to ensure that financial assistance payments made it to enrollees who paid their premiums.”
“Instead, CMS relied on [insurers] to verify that their enrollees were confirmed and to attest that the financial assistance payment information they reported on their templates was accurate,” the inspector general report said.
“The inspector general estimated, based on its sample, that CMS authorized improper payments totaling $434 million for 461,127 policies. It also authorized potentially improper assistance payments of $504 million related to 183,983 policies.”
CMS said in response to the report that OIG derived from a small number of policies to get to the $434 million figure.
“We disagree with OIG’s methodology in estimating the amount of improper financial assistance payments, both because of the extrapolation method used, but also because OIG did not take into consideration guidance that was provided to issuers at that time,” the agency said.