Thinking About Health Plan Dependent Eligibility Audits and Beneficiary Fraud

It is at or near open enrollment season for many health insurance plans.  CalPERS marks the approach of open enrollment by crowing about having dropped 18,000 ineligible dependents from its employer-based health insurance rolls. Interestingly, 5,300 were voluntarily dis-enrolled after the announcement of an amnesty period.

CalPERS tells this as part of a responsible stewardship of the public fisc narrative.  Of course, it might also be told as a pushing 18,000 people into uninsured status narrative.  Perhaps it is both.

We hear more about health plan dependent eligibility audits of late. Indeed, an entire industry has grown up around promoting health plan savings through rigorous dependent eligibility audits. Here's an auditor consultant predicting an 8 percent ineligible dependent enrollment rate. And here's another touting the correct response to various "scenarios" where employees claim valid dependent enrollment but the plan excludes them. My personal favorite among these: never mind the explicit language of your divorce decree, no employer is required to carry a former spouse, it is the plan participant's responsibility to fund this via COBRA."  Of course, the law on Qualified Domestic Relations Orders is notoriously complex, so it would be easy to confuse a court's authority to order coverage for a former spouse with a court's authority to order coverage for a former spouse in a plan that allows former spouse coverage.  I often think this is especially confusing to plan enrollees in a Social Security retirement system that does contemplate all kinds of benefit availability for the former spouse

The most interesting part of all this to me is how underplayed the story of beneficiary fraud in employer sponsored insurance is in the press.  My word, 2.5 percent of the CalPERS dependent population of 700,000 was a party to fraud, a number that — apparently — makes the CalPERS numbers seem modest in comparison  to the touted 8 percent fraudulent dependent enrollment in garden variety employer sponsored commercial insurance.  Where's the outrage? Where are the front page articles on how all dependent coverage provisions of commercial insurance ought to be abolished because of this percentage of apparently fraudulent beneficiary  claims? In 2010, the GAO estimated a ten percent fraud rate for government funded health insurance (both beneficiary fraud and provider fraud). Now, that received lots of press. 

Yes, the speck in our neighbor's eye is surely almost always of more interest than the log in our own, but it is also that  the deceits of middle class people are so much less interesting than the deceits of poor people.

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