GAO: The Federal Employee Health Plan Wasted Billions of Dollars

A Government Accountability Office (GAO) analysis suggests that fraudulent enrollees in the Federal Employees Health Benefits (FEHB) Program may be costing taxpayers up to $3 billion annually.

The Office of Personnel Management (OPM), which oversees the health insurance plans of eight million federal employees and their families, has never carried out an eligibility audit, the report claims.

The Office of Inspector General at OPM has estimated that the cost of ineligible enrollees in the health benefits program is $3 billion to $250 million annually.

The GAO estimates that the FEHB program’s operating costs in fiscal year 2021 came to almost $59 billion.

That’s intolerable, according to Sen. Rick Scott, a Republican from Florida, who intends to present a bill mandating that the OPM conduct member audits next month.

“OPM would commit fraud, or they wouldn’t care about it. It’s not that difficult,” Scott told Politico after requesting the GAO report. “States and corporations engage in it frequently. It’s really easy to set up a software to do this, thus failing to do so indicates your support for fraud.”

Scott said that fraud is not a top priority. However, an OPM representative refuted this, telling the outlet that the organization “takes the integrity of the FEHB Program very seriously and is working diligently with agencies to address improper enrollments within the constraints of our resources from Congress.”

Politico claims that in order to confirm the eligibility of FEHB members, the OPM depends on more than 160 government employment offices and more than 70 contracts with health insurers. The agency does not intend to conduct an audit, claiming that doing so would be too costly, even though the GAO recommended doing so.

OPM informed the outlet that the enrolling agencies would benefit from the savings from the $120 million audit, which would come out of its budget. Rather, the emphasis is on a “centrally enrolled, fully funded FEHB system that would address the issues underlying improper enrollments.” The government declined to comment on the system’s implementation or financial situation.

Approximately 3% of participants were found to be ineligible by the state of Florida during Scott’s tenure as governor, according to a thorough audit that was carried out in 2018. As a result, the state saved more than $20 million annually.

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