Feds: Kynect health insurance enrollment vulnerable to fraud

LOUISVILLE, KY (WAVE) - Supporters and opponents of the Affordable Care Act have held up Kynect -- Kentucky's online and operator-assisted way to sign-up for coverage -- as a shining example of what's right and wrong with making health insurance mandatory.

Now that open enrollment has begun, "undercover testing" from the federal government Accountability Office  gives both sides ammunition.

Kynect has enrolled at least ten people who don't exist, all of whom would receive taxpayer dollar help to pay for coverage.

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"Specifically, our fictitious applicants provided invalid Social Security identities (for Medicaid coverage)," the audit reported. "In situations where we were asked to provide immigration document numbers, we provided impossible immigration document numbers."

GAO investigators made half these applications online, the other half via telephone.

Fake applicants were also able to qualify for help paying for insurance even if they already had coverage, by claiming to work for an employer whose coverage offerings failed to meet "minimum essential" standards.

Undercover investigators also tested enrollment through the "federal" marketplace in New Jersey and North Dakota. California offers an application process similar to the Commonwealth's.  It too, was tested.

"The health care marketplace eligibility determination and enrollment process remains vulnerable to fraud," the audit concluded.

"We appreciate the review of our health benefit exchange," reads a statement from Jill Midkiff and the communications office of Kentucky's Cabinet for Health & Family Services.  "We have already taken steps to improve our website and strengthen our procedures."

WAVE 3 News conducted its own test of Kynect hours after Open Enrollment began Nov. 1.

After calling the toll-free customer service line,  I gave the operator "Kendrick" a birth date that indicated I was 114 years old, my Social Security number's last four digits were 7890, and that my monthly income was $20,000 -- half of which came from Social Security or other government subsidies.

Seven and a half minutes into the phone call, "Kendrick" hadn't questioned any of the answers received.

"Are you required to keep asking for information, even though what I've given you obviously is fraudulent and bogus information?" I asked. "Yes sir," Kendrick replied. "Because, what I was gonna do -- once I did that identity-proofing on you that would have proved -- you wouldn't have been able to enroll."

The GAO shared its audit findings with officials in North Dakota, New Jersey, California and Kentucky.

"Kentucky officials told us....call center staff have been retrained on identity-proofing processes, and that they are improving training for other staff as well," the GAO reported. "They also said they plan changes before the next open-enrollment period so that call-center representatives cannot bypass identity-proofing steps, as occurred with our applications."

As of August, however, Kentucky officials "only inspect for documents that have obviously been altered," the audit claimed. "Kentucky officials also told us there is no current process to identify individuals with multiple enrollments through different marketplaces."

"There has been no breach of security information," the Cabinet's written response stated. "We know that the GAO recommendations have strengthened our continued oversight and monitoring of Kynect. We will continue to protect and ensure the information of those using the exchange to receive affordable, comprehensive health coverage."

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