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........

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