A new report from the Government Accountability Office has found that the Centers for Medicare and Medicaid Services (CMS) does not adequately enforce the ACA requirement that states fund the cost of state-mandated health insurance benefits.
The report, requested by Republicans on the U.S. House Energy and Commerce Committee, raises questions about CMS’s ability to ensure federal taxpayer dollars are not subsidizing state mandates, officials said.
“This report, coupled with the immense Obamacare fraud this administration has overseen, highlights the need for Congress and the incoming administration to work swiftly to safeguard taxpayer funds at every corner of the agency. CMS should prioritize rigorous enforcement of all requirements intended to prevent improper spending,” U.S. Rep. Cathy McMorris Rodgers (R-WA), the committee chair, said. “I commend GAO for its investigative efforts, which will help Congress protect taxpayer dollars by correcting government waste, fraud, and abuse.”
The ACA requires that a set of essential health benefits (EHBs) be covered by insurance plans within the individual health insurance market. According to the legislation passed in 2010, states may choose to mandate additional benefits but are then required to cover the cost of such benefits. States are not permitted to use federal tax dollars, in the form of Advance Premium Tax Credits, to pay for those additional benefits.
In its report, the GAO found that CMS delegates the oversight of this policy to the states instead of enforcing it on its own.
“CMS has limited assurance that APTCs accurately exclude the costs of non-EHB mandated benefits” the report said, and that “CMS has expressed concerns about states’ compliance with this requirement.” The House Republicans determined this to prove their concerns about the potential for improper use of federal tax dollars.
According to the report, “States may require marketplace plans to cover items and services in addition to EHB; we refer to such benefits as non-EHB mandated benefits. However, APTCs cannot be used to offset the costs of these additional benefits. Specifically, the Centers for Medicare & Medicaid Services (CMS)—the federal agency responsible for determining the APTC amounts—must exclude the costs of non-EHB mandated benefits from the APTC calculation. CMS delegates responsibility for identifying non-EHB mandated benefits to the states.”
The report said that even CMS is concerned with states complying with the ACA requirement that states fund the cost of their coverage mandates.
“However, CMS has expressed concerns about states’ compliance with this requirement. For example, in the 2021 Payment Notice, CMS noted state confusion regarding the identification of non-EHB mandated benefits and concerns that the premium data it uses to calculate the APTCs did not exclude their costs, resulting in improper federal payments. CMS reiterated these concerns in its 2022 and 2023 Payment Notices.”
The GAO report found that one state did not believe it was responsible for identifying benefits it must fund, and that CMS does not know if premium data appropriately excludes state-mandated benefits.
In its conclusion, the GAO found that CMS does not have the assurances that federal taxpayer money is not being used improperly, the report said. The GAO is recommending that CMS conduct a risk assessment into its oversight approach to ensure that APTCs exclude the costs of non-EHB mandated benefits. The GAO said the U.S. Department of Health and Human Services agreed with the recommendation.