Fake applications for Obamacare were given insurance subsidies and were able to stay on the healthcare exchange, according to a secret shopper investigation conducted by a government watchdog.
Republicans lashed out at the Obama administration, holding up the latest findings as evidence of "gross mismanagement."
In 2014, the Government Accountability Office created 12 false identities and applied for Obamacare on healthcare.gov. Of those, 11 were approved for subsidies valuing about $30,000.
In a report released by the Senate Finance Committee Wednesday, the GAO found that those 11 applications were re-enrolled in the healthcare plan during the second open enrollment period, which ended in February.
In addition, the applicants were largely able to keep their subsidies.
The marketplace had terminated coverage for six of the 11 applications earlier this year. The subsidies were restored for five of the six applications after they talked with marketplace officials, and they even got more subsidies.
For another six applications, the GAO said it tested to what extent any in-person assisters would encourage applicants to misstate income to get income-based subsidies. But the agency largely failed because it was unable to get in-person assistance for five of the six undercover attempts.
The GAO discovered that the contractors involved in document verification weren't trained as fraud experts and don't perform anti-fraud duties.
The Centers for Medicare and Medicaid Services, which runs the federal exchanges, said it has limited ability to find fraud. The agency said the program doesn't allow the consumer to profit from any fraud since the subsidies go to insurers and not consumers.
The GAO balked at that explanation, saying the subsidies cost the government money.
The subsidies are paid to health insurers but represent "a benefit to consumers and a cost to the government," it said.
CMS said in the report that its experience in the first open enrollment period helped improve training for the 2015 period.
The GAO cautioned that its results don't mean that all applicants and enrollees are scamming the government.
Republicans held up the results as further evidence of poor management of the healthcare program.
"The proof is in the pudding — subsidies can be obtained by using unverifiable information," said frequent Obamacare critic Sen. Orrin Hatch, R-Utah. "Sadly, it's now crystal clear the administration turned a blind eye to fixing a basic component of their ill-conceived law and failed to implement the appropriate safeguards."
Hatch is chairman of the Senate Finance Committee.
The administration has spent billions of dollars to implement the healthcare law, but it has "yet to deliver on its core promises and worse, continues to waste even more taxpayer dollars," blasted Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee.