As we described in our July 2014 testimony, the federal Marketplace approved subsidized coverage for 11 of 12 fictitious applicants who initially applied online or by telephone. For the 11 approved applications, we paid the required premiums to put health-insurance policies into force. We obtained the advance premium tax credit (APTC) in all cases, totaling about $2,500 monthly or about $30,000 annually for all 11 applicants. After receiving these premium subsidies, our 11 fictitious applicants paid premiums at a total annual rate of about $12,000. We also obtained eligibility for cost-sharing reduction (CSR) subsidies. The APTC and CSR subsidies are not paid directly to enrolled consumers; instead, the federal government pays them to issuers of health-care policies on consumers’ behalf. However, they represent a benefit to consumers—and a cost to the government—by reducing out-of-pocket costs for medical coverage. To receive advance payment of the premium tax credit, applicants agree they will file a tax return for the coverage year, and must indicate they understand that the premium tax credits paid in advance are subject to reconciliation on their federal tax return. According to CMS, the purpose of identity proofing is to prevent someone from creating an account and applying for health coverage based on someone else’s identity and without their knowledge. Although intended to counter such identity theft involving others, identity proofing thus also serves as an enrollment control for those applying online. only the applicant is believed likely to know. If an applicant’s identity cannot be verified online, applicants are directed to call the credit reporting agency for assistance.cannot verify identity, applicants are typically told to contact the federal Marketplace or their state-based exchange, credit-reporting agency officials told us. If the credit reporting agency then We subsequently were able to obtain coverage for all six of these applications that we began online by completing them by phone. By following instructions to make telephone contact with the Marketplace, we circumvented the initial identity-proofing control that had stopped our online applications. When we later asked CMS officials about this difference between online and telephone applications, they told us that unlike with online applications, the Marketplace allows phone applications to be made on the basis of verbal attestations by applicants, given under penalty of perjury, who are directed to provide supporting documentation. For our 6 phone applications, we successfully completed the application process, with the exception of one applicant who declined to provide a After being Social Security number and was not allowed to proceed.approved for coverage, we received enrollment material from insurers for each of our 11 successful fictitious applicants. Appendix I summarizes outcomes for all 12 of our phone and online applications. The Marketplace is required to seek postapproval documentation in the case of certain application “inconsistencies.” Inconsistencies occur in instances in which information an applicant has provided does not match information contained in data sources that the Marketplace uses for eligibility verification at time of application, or such information is not available. For example, an applicant might state income at a particular amount, but his or her federal tax return lists a different amount, or the applicant has no tax return on file. Likewise, the applicant may provide a Social Security number, but it does not match information on file with the SSA. If there is such an application inconsistency, the Marketplace is to determine eligibility using attestations of the applicant, and ensure that subsidies are provided on behalf of the applicant, if he or she is eligible to receive them, while the inconsistency is being resolved using “back-end” controls. Thus, the Marketplace was required to approve eligibility to enroll in health-care coverage and to receive subsidies for each of our 11 fictitious applicants while the inconsistencies were being addressed. At the time of our July 2014 testimony, we had begun to receive notifications from the Marketplace on the outcomes of our fictitious document submissions. As discussed later in this statement, we continued to receive additional notices about our applicants through 2014 and into 2015. According to CMS officials, the federal Marketplace makes eligibility determinations. Private insurers, also called “issuers,” provide coverage. applicant may be affected by something, and then leaving it to the applicant to parse through details to see if they were indeed affected. Inaccurate guidance. The Marketplace directed 8 of our 11 successful applicants to submit additional documentation to prove citizenship and identity—but an accompanying list of suitable documents that could be sent in response consisted of items for proving income. Lack of Marketplace notice on document submissions. In five cases, we did not receive any indication on whether information sent in response to Marketplace directives was acceptable. As a result, we had to call the Marketplace to obtain status information. According to CMS, after documents are processed, consumers will receive a written notice. Lack of written notice. In one case, the Marketplace did not provide us with any written correspondence directing we submit additional documentation. The Marketplace only requested documentation for the initial enrollment during our phone application for coverage. According to the Marketplace, applicants are to receive written notice of documentation required. CMS officials told us they are working to improve communication with consumers, and will make improvements in consumer notices. According to the officials, they are soliciting feedback from consumer advocates, call-center representatives, and application assisters to improve such communications. According to the officials, CMS has already made significant improvements that include adding a complete list of acceptable documents to resolve citizenship and immigration status inconsistencies, and consolidating warning notices to include all inconsistency issues. CMS is currently working on further improvements in notices, including those for eligibility and instances of insufficient documentation, according to the officials. As part of our testing, and in response to Marketplace directives, we provided follow-up documentation, albeit fictitious. Overall, as shown in appendix II, we varied what we submitted by application—providing all, none, or only some of the material we were told to send—in order to test controls and note any differences in outcomes. Among the 11 applications for which we were directed to send documentation, we submitted all requested documentation for four applications, partial documentation for four applications, and no documentation for the remaining three applications. Although our documentation was fictitious, and in some cases we submitted none, or only some, of the documentation we were directed to send, we retained our coverage for all 11 applicants through the end of the 2014 coverage year. As described earlier, APTC subsidies our applicants received totaled about $30,000 annually, and further financial benefit would have been available through CSR subsidies if we had obtained qualifying medical services. Following our document submissions, the Marketplace told us, either in writing or in response to phone calls, that the required documentation for all our approved applicants had been received and was satisfactory. In one case, when we called the Marketplace to inquire about the status of our documentation submission—but where we had not actually submitted any documents—a representative told our applicant that documents had been reviewed and processed, and, “There is nothing else to do at this time.” Figure 1 shows a portion of a call in which a Marketplace representative said our documentation was complete, even though we did not submit any documents. For one applicant, the Marketplace did subsequently state in a November 2014 letter that we would lose our subsidies, beginning in December 2014. However, there was no follow-up communication regarding the loss of our subsidies, and the subsidies were not terminated in December 2014. On the basis of applicant data we obtained from CMS, the Marketplace cleared inconsistencies for some of our 11 fictitious applications in instances where we submitted bogus documents.a summary of our document requests and submissions. We also noted instances where the Marketplace either did not accurately capture all inconsistencies, or resolved inconsistencies based on suspect documentation, including the following: Did not capture all inconsistencies. For 3 of the 11 applicants, while the Marketplace at the outset directed our applicants to provide documentation of citizenship/immigration status, the CMS applicant data we later received for these applicants do not reflect inconsistencies for the items initially identified. Disqualifying income. For 2 of the 11 applicants, we reported income substantially higher than the amount we initially stated on our applications, and at levels that should have disqualified our applications from receiving subsidies. However, according to the CMS data, the Marketplace resolved our income inconsistencies and, as noted, our APTC and CSR subsidies for both applicants continued. In addition to having fictitious documentation approved, two of our applicants also received notices in early 2015 acknowledging receipt of documents recently submitted, when we had not sent any such documents. We do not know why we received these notices. We found that the CMS document-processing contractor is not required to seek to detect fraud. It is only required to inspect for documents that have obviously been altered. According to contractor executives we spoke with, the contractor personnel involved in the document-verification process are not trained as fraud experts and do not perform antifraud duties. In particular, the executives told us, the contractor does not certify the authenticity of submitted documents, does not engage in fraud detection, and does not undertake investigative activities. In the contractor’s standard operating procedures for its work for CMS, document-review workers are directed to “determine if the document image is legible and appears unaltered by visually inspecting it.” Further, according to the contractor, it is not equipped to attempt to identify fraud, and does not have the means to judge whether documents submitted might be fraudulent. CMS officials told us there have been no cases of fraudulent applications or documentation referred to the U.S. Department of Justice or the HHS Office of Inspector General, because its document-processing contractor has not identified any fraud cases to CMS. However, as noted earlier, the contractor is not required to detect fraud, nor is it equipped to do so. According to the CMS officials, there has been “no indication of a meaningful level of fraud.” According to CMS officials, it would not be practical to have applicants show original documents at time of application. With the HealthCare.gov website, the agency decided to move away from in-person authentication, in order to avoid burden on consumers, the officials told us. They also said in-person presentation of documentation is not possible in the current structure, as there are insufficient resources to establish a system to do so. Overall, according to CMS officials, the agency has limited ability to respond to attempts at fraud. They told us CMS must balance consumers’ ability to “effectively and efficiently” select Marketplace coverage with “program-integrity concerns.” CMS places a strong emphasis on program integrity and builds program integrity features into all aspects of implementation of the law, according to CMS officials. In any case, the CMS officials said the design of the program does not allow for direct consumer profit from fraud, because APTC and CSR subsidies are paid to policy issuers, not consumers. We note, however, that even so, the subsidies nevertheless can produce direct financial benefits to consumers. For example, if consumers elect to receive the premium tax credit in advance, that lowers the cost of monthly coverage. A consumer could also receive the advance premium tax credit and not file a federal tax return, as required to ensure proper treatment of the credit. Likewise, CSR subsidies mean smaller out-of-pocket expenses when obtaining medical services. Accordingly, although subsidies may be paid directly to issuers, they still result in a cost to the government and a benefit to enrollees. CMS officials told us the agency plans to conduct an assessment of the Marketplace’s eligibility determination process, including the application process and the inconsistency resolution process. They did not provide a firm date for completion, saying the review would depend on obtaining IRS information for use as a reference. According to the applicant data we obtained from CMS, most of our applications had unresolved inconsistencies—indicating either that the Marketplace did not receive requested documentation or the documentation was not satisfactory. Specifically, as shown in appendix III, the CMS data indicate that, as of April 2015, 7 of our 11 applications had at least one inconsistency that remained unresolved. Because we did not disclose the specific identities of our fictitious applicants, CMS officials said they could not explain our findings on handling of inconsistencies for our applications. However, in general, they said our subsidized policies may have remained in effect during 2014 because CMS waived certain document filing requirements. Specifically, CMS directed its document contractor not to terminate policies or subsidies if an applicant submitted any documentation to the Marketplace. That is, if an applicant submitted at least one document, whether it resolved an inconsistency or not, that would be deemed sufficient so that the Marketplace would not terminate either the policy or subsidies of the applicant, even if other documentation had initially been required. For example, for one of our applicants, the Marketplace requested citizenship, income, and identity documents, but our applicant submitted only identity information. Under the CMS directive, the applicant’s policy and subsidies continued through 2014 because our applicant submitted at least one document to the Marketplace, but not all documents required. Thus, in the case of our four applicants that submitted partial documentation to the Marketplace, we likely were relieved of the obligation for submitting all documents for the 2014 plan year. For the 2014 plan year, PPACA authorized CMS to extend the period for applicants to resolve inconsistencies unrelated to citizenship or lawful presence. Additionally, regulations state that CMS may extend the period for an applicant to resolve any type of inconsistency when the applicant demonstrates a “good faith effort” to submit documentation. CMS officials told us they relied upon these authorities to make a policy decision to broadly extend the period for resolving all types of inconsistencies in 2014. Under the policy, the officials told us, the submission of a single document served as evidence of a good faith effort by the applicant to resolve all inconsistencies, and therefore extended the resolution period through the end of 2014. As such, CMS did not terminate any applicant who “demonstrated a good faith effort” in 2014. The officials told us that CMS is enforcing the full submission requirement for 2015, and that any good-faith extensions granted in 2015 would be decided on a case-by-case basis and be limited in length. All consumers, regardless of whether they benefitted from the good-faith effort extension in 2014, will still be subject to deadlines for filing sufficient documentation, they said. In particular, according to the officials, those who made a good- faith effort by submitting documentation, but failed to clear their inconsistencies in 2014, were among the first terminations in 2015, which they said took place in February and early March. We are continuing to seek further information from CMS officials on their good-faith effort policy, as well as any 2015 terminations, as part of ongoing work. Although the good-faith effort policy could explain the handling of some of our applications, CMS officials could not provide a general explanation for the three applications for which we submitted no documentation but our subsidized coverage remained. However, based on our examination of applicant files at the CMS document contractor, this could be due to an error in the CMS enrollment system. Specifically, we found instances in which records we reviewed showed that applicants had not enrolled in a plan, when they actually had done so. Contractor officials told us that in such cases, they did not terminate the plans or subsidies because the applicants were shown as not enrolled. We plan to address this issue of tracking of inconsistencies in our ongoing work. Also included among the unresolved inconsistencies for our applicants were four for Social Security numbers. According to CMS officials, inconsistencies for Social Security numbers occur when an applicant’s name, date of birth, and Social Security number cannot be validated in an automated check with SSA. The officials told us that systems capability has not allowed CMS’s document contractor to make terminations for such inconsistencies. They also said the agency has done no analysis of the fiscal effect of not making such terminations. We plan to address this issue in ongoing work. In addition, CMS officials told us that although it checks applicants or enrollees against SSA’s Death Master File, it currently does not have the systems capability to change coverage if a death is indicated. Instead, the officials told us, the Marketplace has established a self-reporting procedure for individuals to report a consumer’s death in order to remove the consumer from coverage. The number of reported deaths from SSA is “very minimal,” according to CMS officials. The coverage we obtained for our 11 fictitious applicants contained an automatic reenrollment feature—both insurers and the Marketplace notified us that if we took no action, we would automatically be enrolled in the new coverage year (2015). In all 11 of our cases, we took no action and our coverage was automatically reenrolled in January 2015. We continued to make premium payments, in order to demonstrate continuation of subsidized coverage, which meant continuing costs for the federal government. Appendix IV summarizes our automatic reenrollments. Although we obtained automatic reenrollments, we found communications from the Marketplace leading up to the end of 2014 to be contradictory or erroneous. Examples include the following: As noted earlier, our applicants were notified they would automatically be reenrolled for the new coverage year. But most of the applicants also received, to varying degrees, notices to reapply or to take some type of action. For example, we received notices stating: “Official Notice: Your 2015 application is ready,” “Action Needed: Your 2015 health coverage,” and “Follow these steps to re-enroll by December 15.” The message and frequency of these notices could create uncertainty among applicants who believed they need not take any action to remain enrolled. In correspondence to our applicants, the Marketplace referred to things that could not have happened. In four cases in the latter part of 2014, Marketplace correspondence referred to the filing of federal tax returns of our applicants, even though our applicants never filed a tax return. In four cases, our enrollees received notices directing them to send additional information in order to continue coverage, saying they could lose coverage if they did not—but the deadline for submission was a date that had passed months earlier. For example, one enrollee received such a notice in December 2014, advising that coverage might be lost six months earlier, in June 2014. As mentioned previously, CMS officials told us they are working to improve communication with consumers, and will make improvements in consumer notices. Under PPACA, an applicant’s filing of a federal income-tax return is a key element of back-end controls. When applicants apply for coverage, they report family size and the amount of projected income. Based, in part, on that information, the Marketplace will calculate the maximum allowable amount of advance premium tax credit. An applicant can then decide if he or she wants all, some, or none of the estimated credit paid in advance, in the form of payment to the applicant’s insurer that reduces the applicant’s monthly premium payment. If an applicant chooses to have all or some of his or her credit paid in advance, the applicant is required to “reconcile” on his or her federal tax return the amount of advance payments the government sent to the applicant’s insurer on the applicant’s behalf with the tax credit for which the applicant qualifies based on actual reported income and family size. To facilitate this reconciliation process, the Marketplace sends enrollees Form 1095-A, which reports, among other things, the amount of advance premium tax credit paid on behalf of the enrollee. This information is necessary for enrollees to complete their tax returns. The accuracy of information reported on this form, then, is important for determining an applicant’s tax liability, and ultimately, government revenues. We found errors with the information reported on 1095-A forms for 3 of our 11 fictitious applicants.containing different information for the same applicant. In all three cases, the forms did not accurately reflect the number of months of coverage, thus misstating the advance premium tax credits received. In one of the cases, for instance, the form did not include a couple of months of advance premium tax credit that was received and, as a result, understated the advance premium tax credit received by more than $600. Appendix V shows complete results for tax forms we received. Because we did not provide CMS with detailed information about the specific cases, CMS officials said they could not conduct research and explain In two cases, we received multiple forms why these errors occurred. In general, CMS officials told us the agency made quality checks on tax information before mailings to consumers. During our testing work, we also identified that unlike advance premium tax credits, CSR subsidies are not subject to a recapture process such as reconciliation on the taxpayer’s federal income-tax return. In discussions with CMS and IRS officials, we found that the federal government has not established a process to identify and recover the value of CSR subsidies that have been provided to our fictitious enrollees improperly. These subsidies increase government costs; and, according to IRS, excess CSR payments, if not recovered by CMS, would be taxable income to the individual for whom the payment was made. We are continuing to seek information from CMS on any efforts to recover costs associated with subsidy reductions or eliminations due to unresolved inconsistencies. In December 2014, the Marketplace sent notifications to 5 of our 11 applicants, indicating that we had filed new applications for subsidized coverage. In four of these notices, the Marketplace stated our subsidies or coverage, or both, would be terminated if we failed to provide supporting documentation. However, we had not filed any such applications, nor, as described earlier, had we sought any redetermination of subsidies. Because each of our fictitious applicants earlier received either written or verbal assurances from the Marketplace that documentation had been received and no further action was necessary, we did not respond to these requests to submit supporting documentation. A few months later, the Marketplace terminated coverage or subsidies for six applicants, including four applicants who had received notice of new applications in December 2014, and two applicants who had not received notice of a new application. The termination notices cited failure to respond to requests to submit documentation in support of what were claimed to be the new applications we submitted. Our remaining five applicants continued receiving subsidized coverage without interruption. Following the termination notices, we elected to pursue continued coverage for the six cases as part of our testing, even though we had not filed the claimed new applications. Each of our six fictitious applicants that lost coverage or subsidies made phone inquiries to the Marketplace for an explanation of the terminations. In three of these inquiries, the Marketplace representatives told our applicants that they were required to file a new application or supporting documentation each year. However, as described earlier, notifications we received earlier from the Marketplace and insurers told us that no actions were needed to automatically reenroll in our plans other than to continue to pay premiums. In addition, as noted, other applicants did not receive notices of new applications being filed. We are continuing to seek from CMS information on this treatment of our applicants. Next, for each of these six fictitious applicants, we requested in Marketplace phone conversations reinstatement of coverage or subsidies. For five of the six applicants, the Marketplace approved reinstatement of subsidized coverage, while in the process also increasing total premium tax credit subsidies for all these applicants combined by a total of more than $1,000 annually. For the sixth applicant, a Marketplace representative said a caseworker must evaluate our situation. We were told we could not speak with the caseworker, and it could take the caseworker up to 30 days to resolve the issue. This applicant’s case was still pending at the time we concluded our undercover activity in April 2015. Appendix VI summarizes outcomes for the unknown applications and terminations that followed for six of our applicants. For three of the five applicants for whom we obtained reinstatement of subsidized coverage, we had open inconsistencies related to citizenship/immigration status remaining from our initial applications for 2014, according to CMS data. For each of these three applications, we had never submitted any citizenship or immigration documentation to the Marketplace for resolution. Nonetheless, we had subsidized coverage restored. We are continuing to seek from CMS any information on whether procedures allow repeated applications as a way to avoid document-filing requirements. As described earlier, CMS has awarded grants for “Navigators,” which are to provide free, impartial health-insurance information to consumers. In addition, such aid is also to be available from other in-person assisters (“non-Navigators”) who generally perform the same functions as Navigators, but are funded through separate grants or contracts. As described in our July 2014 statement, in addition to the 12 online and telephone applications, we also attempted an additional 6 in-person applications, seeking to test income-verification controls only. During our testing, we visited one in-person assister and obtained information on whether our stated income would qualify for subsidy. In that case, as shown in Figure 2, a Navigator correctly told us that our income would not qualify for subsidy. However, for the remaining five in-person applications, we were unable to obtain such assistance. We encountered a variety of situations that prevented us from testing our planned scenarios.later returned to the locations, seeking explanations on why we could not We obtain the advertised assistance, which are also shown in figure 2. Representatives of these organizations generally acknowledged the issues we raised in handling of our application inquiries. We shared these results with CMS officials, who said they could not comment on the specifics of our cases without knowing details of our undercover applications. CMS officials said Navigators are required to accept all applicants, even if an organization’s mission is to work with specific populations. If Navigators cannot provide timely help themselves, they must refer applicants to someone who can give assistance. CMS officials also said that they can terminate grant agreements, among other enforcement actions, if Navigators do not comply with terms of their awards. They cited as an example a corrective action taken in March 2015 against a Navigator grantee operating in several states for not providing the full range of activities it promised. CMS officials stressed to us Navigator training and experience from the first open-enrollment period helped improve training for the second enrollment period ending in February 2015. As noted earlier, our review of in-person assistance was limited to the extent we encountered Navigators and non-Navigators as part of our enrollment control testing. A full examination of in-person assistance was beyond the scope of our work. CMS officials told us there is no formal policy or specific guidance for situations such as the one we encountered in a case described in figure 2, in which an applicant is asked if he or she wishes to perform a service, such as volunteering for union activities, at the time the applicant seeks assistance. Still, CMS officials said Navigators would be discouraged from such activities while applicants seek help. CMS officials told us it is reasonable for consumers to think that if an assister is listed on the federal website as providing help—as were the assisters we selected—that assistance should be available as indicated. CMS officials told us the agency recognizes challenges with its online tool to find local assistance, and has been working to make changes. We are continuing to seek written documentation on these planned improvements. Chairman Hatch, Ranking Member Wyden, and Members of the Committee, this concludes my statement. I would be pleased to respond to any questions that you may have. For questions about this statement, please contact Seto J. Bagdoyan at (202) 512-6722 or BagdoyanS@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Individuals making key contributions to this statement, or our 2014 statement reporting preliminary results, include: Matthew Valenta and Gary Bianchi, Assistant Directors; Maurice Belding; Mariana Calderón; Marcus Corbin; Carrie Davidson; Paul Desaulniers; Colin Fallon; Suellen Foth; Sandra George; Robert Graves; Barbara Lewis; Maria McMullen; James Murphy; George Ogilvie; Shelley Rao; Ramon Rodriguez; Christopher H. Schmitt; Julie Spetz; Helina Wong; and Elizabeth Wood. Figure 3 summarizes outcomes for all 12 of the undercover phone and online applications we made for coverage to the Health Insurance Marketplace (Marketplace) under the Patient Protection and Affordable Care Act, as part of our testing of eligibility and enrollment controls. Figure 4 shows, by application, the documentation we submitted in support of the 11 undercover applications that were successful. As part of our eligibility- and enrollment-controls testing, we varied what we submitted by application—providing all, none, or only some of the material we were told to send. Figure 5 shows, by application, a summary of our document requests and submissions, with Marketplace communications on adequacy of the submissions, for the 11 undercover applications that were successful. Figure 6 summarizes automatic reenrollment activity at the end of the 2014 coverage year for the 11 undercover applications that were successful. Figure 7 summarizes receipt of Forms 1095-A, for reconciliation of advance premium tax credits received, for the 11 undercover applications that were successful. Figure 8 summarizes outcomes for the six applicants for whom the Marketplace terminated subsidies or coverage in early 2015. Prior to termination, four of these applicants had received notices of new applications filed, although we did not file any such applications. Following notice of the terminations, we restored subsidized coverage in five of six cases, with one case pending at the time we concluded our undercover activity.

Summary: PPACA provides for the establishment of health-insurance exchanges, or marketplaces, where consumers can compare and select private health-insurance plans. The act also expands the availability of subsidized health-care coverage. The Congressional Budget Office estimates the cost of subsidies and related spending under the act at $28 billion for fiscal year 2015. PPACA requires verification of applicant information to determine eligibility for enrollment or subsidies. GAO was asked to examine controls for application and enrollment for coverage through the federal Marketplace. This testimony describes (1) the results of GAO's undercover testing of the Marketplace's eligibility and enrollment controls, including opportunities for potential enrollment fraud, for the act's first open-enrollment period; and (2) additional undercover testing in which GAO sought in-person application assistance. This statement is based on GAO undercover testing of the Marketplace application, enrollment, and eligibility-verification controls using 18 fictitious identities. GAO submitted or attempted to submit applications through the Marketplace in several states by telephone, online, and in-person. Details of the target areas are not disclosed, to protect GAO's undercover identities. GAO's tests were intended to identify potential control issues and inform possible further work. The results, while illustrative, cannot be generalized to the full population of applicants or enrollees. GAO provided details to CMS for comment, and made technical changes as appropriate. To assess the enrollment controls of the federal Health Insurance Marketplace (Marketplace), GAO performed 18 undercover tests, 12 of which focused on phone or online applications. During these tests, the Marketplace approved subsidized coverage under the Patient Protection and Affordable Care Act (PPACA) for 11 of the 12 fictitious GAO applicants for 2014. The GAO applicants obtained a total of about $30,000 in annual advance premium tax credits, plus eligibility for lower costs due at time of service. For 7 of the 11 successful fictitious applicants, GAO intentionally did not submit all required verification documentation to the Marketplace, but the Marketplace did not cancel subsidized coverage for these applicants. While these subsidies, including those granted to GAO's fictitious applicants, are paid to health-care insurers, and not directly to enrolled consumers, they nevertheless represent a benefit to consumers and a cost to the government. GAO's undercover testing, while illustrative, cannot be generalized to the population of all applicants or enrollees. GAO shared details of its observations with the Centers for Medicare & Medicaid Services (CMS) during the course of its testing, to seek agency responses to the issues raised. Other observations included the following: The Marketplace did not accurately record all inconsistencies. Inconsistencies occur when applicant information does not match information available from Marketplace verification sources. Also, the Marketplace resolved inconsistencies from GAO's fictitious applications based on fictitious documentation that GAO submitted. Overall, according to CMS officials, the Marketplace did not terminate any coverage for several types of inconsistencies, including Social Security data or incarceration status. Under PPACA, filing a federal income-tax return is a key control element, designed to ensure that premium subsidies granted at time of application are appropriate based on reported applicant earnings during the coverage year. GAO, however, found errors in information reported by the Marketplace for tax filing purposes for 3 of its 11 fictitious enrollees, such as incorrect coverage periods and subsidy amounts. The Marketplace automatically reenrolled coverage for all 11 fictitious enrollees for 2015. Later, based on what it said were new applications GAO's fictional enrollees had filed—but which GAO did not itself make—the Marketplace terminated coverage for 6 of the 11 enrollees, saying the fictitious enrollees had not provided necessary documentation. However, for five of the six terminations, GAO subsequently obtained reinstatements, including increases in premium tax-credit subsidies. For an additional six applicants, GAO sought to test the extent to which, if any, in-person assisters would encourage applicants to misstate income in order to qualify for income-based subsidies during coverage year 2014. However, GAO was unable to obtain in-person assistance in 5 of the 6 undercover attempts. For example, an assister told GAO that it only provided help for those applying for Medicaid and not health-care insurance applications. Representatives of these organizations acknowledged the issues GAO raised in handling of the inquiries. CMS officials said that their experience from the first open-enrollment period helped improve training for the 2015 enrollment period.