Fraud alert: White House worries about Obamacare scams

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White House,Paul Bedard,Washington Secrets,Obamacare,Health and Human Services,Health Care,Medicare and Medicaid,Kathleen Sebelius

With just 12 days before the president’s new national health insurance program kicks in, the White House is warning that Obamacare users could face massive fraud, theft of their personal financial and health information, and even “cybersecurity threats.”

The problem is so serious that the administration held an 11th hour summit at the White House today to kick off a joint federal-state anti-fraud effort that will include building a whole new bureaucracy to handle consumer complaints and educate Americans about the anticipated Obamacare scams in the works.

“Today, we are sending a clear message that we will not tolerate anyone seeking to defraud consumers in the Health Insurance Marketplace,” said Health and Human Services Secretary Kathleen Sebelius in a statement issued after the summit. “We have strong security safeguards in the marketplace to protect people’s personal information against fraud and we will work with our partners to aggressively prosecute bad actors, just as we have been doing in Medicare, Medicaid and the Children’s Health Insurance Program.”

Both Attorney General Eric Holder and Federal Trade Commission Chairwoman Edith Ramirez were at the White House Obamacare anti-fraud summit.

Up until now, little has been said of expected financial and cyber scams consumers will face when they seek out insurance at marketplace exchanges around the nation or via the internet. But the officials said that past experience with other federal programs has led them to believe that there is a whole underworld of fraud about to be unleashed when Obamacare comes online Oct. 1.

To show just how bad the administration expects the situation to be, consider what’s being put in place to fight Obamacare fraud: a call center will have trained staff to take consumer complaints; the Obamacare website will connect consumers with the FTC’s complaint center; a “rapid response mechanism” will be established to sniff out privacy and cybersecurity threats; and a new public education campaign will be established to help consumers avoid scams.

The biggest issue the administration seems to fear is identity theft. Most Obamacare consumers will have to supply health, financial and personal information. Congress is currently checking to make sure that the federal data system is protected and can’t be hacked. But that won’t help consumers who are tricked into going into fraudulent Obamacare health insurance sites.

"At the FTC, we know all too well how scammers invariably try to take advantage of developments in the marketplace and new government programs," said FTC Chairwoman Edith Ramirez in the statement from HHS. "We will be vigilant as always in cracking down on this type of opportunistic fraud."

Paul Bedard, The Washington Examiner's "Washington Secrets" columnist, can be contacted at pbedard@washingtonexaminer.com.