The federal official managing Obamacare's "navigators" told congressional investigators that “he had no indication" that the program's healthcare.gov website would not work when it launched on Oct. 1.
Gary Cohen also had no contingency plan if the website went down, according to a new congressional report for the House Committee on Oversight and Government Reform.
An advance copy of the report -- which is being released Monday -- was obtained by the Washington Examiner. The committee's chairman is California Republican Darrell Issa.
The Navigator program also suffers from insufficient consumer protections, lax training and internal controls to report misconduct, the report said.
The Obamacare Navigator program was born earlier this year when U.S. Department of Health and Human Services officials awarded $67 million to 105 community groups and organizations.
Individuals, some of whom had no particular prior experience in the insurance field, were recruited to help Obamacare applicants decipher the complex and confusing healthcare application. The government recruited and paid 2,500 individuals for the jobs, but barred insurance agents from applying.
Cohen directs the Center for Consumer Information and Insurance Oversight, which runs the Navigator program at HHS. He told committee investigators of his surprise and lack of contingency planning at a Nov. 21 briefing.
Cohen said he was unprepared for the website crash and that the agency lacked a contingency plan if the website did not work.
He admitted to investigators the untrained Navigators lacked direction in the early days after the crash because “it took a while to know what was happening.”
He told investigators that “we tried to stay with the website as long as possible out of caution, but at some point it was clear that we had to go with paper and the call center.”
Cohen described “widespread confusion” within the Navigator program in the first month when the website was frequently inoperative.
The Navigators were originally told to use only the website to enroll applicants. They were not trained in the use of paper applications.
Vicki Gottlich, who initially ran the Navigators' consumer support group, told committee investigators in the Nov. 21 briefing that she advised Navigators that “99.99 percent of the time there’s going to be no paper applications … Navigators are not going to be completing paper applications. Navigators are going to be doing all the applications online.” Gottlich is now a special advisor to Cohen.
Mandy Cohen, the current consumer support director, told the staffers, “‘it seems like in hindsight,’ there should have been contingency plans for the website’s failure.”
HHS has conducted no background checks on any of the 2,500 Navigators hired to date even though they routinely handle applicants' private information, including Social Security numbers and tax information.
At a May 21 hearing of the Issa committee, Cohen was asked how Navigators should respond if an applicant said they were being paid under the table and failed to report income. Government health insurance premium subsidies decrease as applicants' incomes increase.
Cohen replied that he would “have to think about that and talk to folks.”
But in the November briefing, according to the report being released Monday, “Cohen stated that he did not anticipate tax fraud to be an issue."
Committee investigators concluded that that “the [Obama] administration has not taken the necessary steps to prevent this type of tax fraud.”
When HHS announced the Navigator program, officials said “Navigators are trained to provide unbiased information in a culturally competent manner to consumers about health insurance.”
But HHS issued a regulation that "traditional insurance agents cannot be selected and trained as Navigator workers.”
Prior to taking over the Navigators, Cohen directed Obamacare's $2 billion program to establish 24 new state-level health insurance co-ops to compete with private health insurance providers.
An Office of Management and Budget report forecast that under the best conditions, 40 percent of the co-ops likely would fail, with taxpayers footing the bill.