A new report from the Government Accountability Office (GAO) identified possible sources of fraud in the Affordable Care Act exchanges. GAO identified several ways in which fraudsters could game the system, such as submitting applications for people who do not exist or did not know that an insurance plan was being purchased in their name.

They also noted that there appeared to be a number of cases where plan changes were made without the person’s knowledge. In these cases, an agent could collect a fee, but the beneficiary may find they are no longer covered by the insurance plan they thought they had.

There are a couple of important points that need to be made about the GAO study upfront. First, GAO was identifying potential instances of fraud, not actual fraud. For example, a plan could be switched by a spouse or relative without the person’s knowledge. That would be unfortunate, but not necessarily an instance of fraud. It’s also possible that some of the instances where it seems that a Social Security number was used multiple times were due to a number being entered incorrectly, rather than actual fraud.

In any case, the number of questionable policies identified by GAO were in the tens of thousands in a system that provides insurance for almost 20 million people. This means that if we took a figure at the high end of GAO’s identification of potential fraudulent policies, it would be well under 0.5 percent of the total number of policies in the exchanges. This means that over 99.5 percent of the policies were for people who the program was intended to help.

The other point is that the type of potential fraud identified by GAO was overwhelmingly benefiting insurers or agents who match people with policies. Insurers might have been getting paid for policies that effectively did not exist, or agents were collecting a fee for selling these policies. These types of fraud are not giving people insurance to which they were not entitled.

However, the most important conclusion from the GAO report is that to identify and root out fraud and waste from the government, it is necessary to have competent staff that understand the programs they are assessing. They can do the sort of analysis GAO did in this report, and look for potential and actual problems in the way a program is being administered.

This is exactly why GAO exists. It also is why most government agencies and departments have Inspector Generals (IG). The IGs continually review the agency they are assigned to oversee and call attention to potential sources of waste and fraud.

For example, the Inspector General of the Small Business Administration (SBA) found that close to 5.0 percent of the loans, involving tens of billions of dollars, issued under the pandemic Paycheck Protection Program in 2020 may have been fraudulent. These loans were issued under Trump SBA Secretary Linda McMahon (currently Secretary of the Department of Education). This would have implied billions of dollars of improper payments. Donald Trump fired most of the IGs shortly after taking office.

While GAO and agency IGs provide a staff of people with detailed institutional knowledge of where potential problems exist, Elon Musk and his team of “super-high IQ” DOGE boys had no comparable background. As a result, their efforts to weed out waste and fraud were often counterproductive.

For example, Musk offered all government workers an incentive to retire early or quit their job. He had to be told that there was already a shortage of workers in many occupations, like air traffic controllers, so encouraging them to quit was not a clever idea. He quickly retracted that one.

The DOGE team also fired much of the staff of the National Nuclear Security Administration, apparently without the knowledge that this agency is entrusted with keeping our stockpile of nuclear weapons secure. When DOGE discovered this, they had to run around and try to track down and rehire the essential employees they had fired. This task was made more difficult by the fact that they had deleted their government e-mail accounts. In fact, many of the workers across the government who were fired by DOGE have since been rehired, often after having a seven month stretch of effective paid vacation.

In another exhibition of extreme ignorance, Musk became obsessed with the idea that 20 million dead people were getting Social Security benefits, almost one-third of the total. This was because he did not understand the way the program does its accounting. In fact the instances where checks continue to be sent after a person’s death are few and far between, and the government gets much of this money back. But this reality did not stop Musk from passing along his confusion to Donald Trump, who made the 20 million dead Social Security beneficiaries a central feature of his first State of the Union Address.

It would take an extensive investigation to determine whether the DOGE actually saved the government any money. There is no doubt it created a huge amount of chaos and confusion and managed to miss major sources of potential fraud, notably in I.R.S. tax collection from corporations and wealthy individuals. It also chose to ignore glaring sources of waste that had already been identified, such as the Medicare Advantage program.

It will be some time before it is possible to determine the long-term damage from people with skills and experience leaving the government or opting not to seek government employment going forward. It seems a major goal of DOGE was to make government jobs very unattractive, which means many people with other options will opt to not work in government. This DOGE cost will be seen over the next years and decades.

We should all be supportive of serious efforts to weed out government waste and fraud, as the GAO did with this report. But this effort requires serious analysis of how the programs work. A chainsaw is not a helpful tool in this effort.

This first appeared on Dean Baker’s Beat the Press blog.

The post GAO Identifies Fraud Risk in Obamacare Exchanges. Where Was DOGE? appeared first on CounterPunch.org.

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