Audit finds Maryland Health Benefit Exchange has continued problems in verifying some applicants’ Medicaid eligibility

For the second time in three years a state audit of Maryland’s health insurance exchange system found continued problems in the program’s verification of some applicants’ income to determine their eligibility for Medicaid over a three-year period.

A 2018 audit of the quasi-governmental agency that oversees the Maryland health exchange found similar problems with Medicaid eligibility screenings over fiscal years 2015 to 2017.


The latest review, examining fiscal years 2018 to 2020, found that the Medicaid eligibility process did not take some applicants’ federal tax data into account, limiting it to only state wage information.

The Maryland Health Benefit Exchange was created under the Affordable Care Act, known as Obamacare, to run an online insurance portal where people could buy health insurance if they did not get coverage at work. In Maryland, residents also sign up for Medicaid through the exchange. A goal of the exchange is to get as many people enrolled as possible to keep rates affordable.


“[Maryland Health Benefit Exchange’s] eligibility determination process was not as comprehensive as possible, as MHBE did not verify certain applicants’ income against available federal tax information,” according to a summary of the audit.

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By limiting Medicaid eligibility to state wage data only, the state’s health exchange may have excluded some pertinent financial information — such as wages earned from certain out-of-state employers, alimony and rental income — all of which is usually considered during the Medicaid application process, according to a copy of the report. This could allow people who omit or misrepresent their income to get access to federal and state benefits for which they may not actually qualify.

Michelle Eberle, the agency’s executive director, said in a written response to the state’s legislative auditor that the exchange’s leadership team “promptly addressed” the recommendations and will take corrective actions.

The exchange program will begin collecting cloud-based electronic data soon through the Maryland Department Labor, according to an agency response memo addressed to the auditors, which will allow the exchange to more easily verify income data.

The group also met with representatives from the U.S. Centers for Medicare and Medicaid Services after the last audit and determined that Maryland did not violate the law in considering federal tax income as a secondary data source. Together, they determined that using state wage data as a primary source was within Maryland’s rights.

“When developing the Verification Plan, [Medical Care Program Administration] sought to mitigate significant disruption in determining applicants’ eligibility, increased costs and delays caused by inaccurate determinations, and the need for case worker intervention to perform additional, manual verifications,” according to the response memo.

The audit found that the exchange corrected the seven other problems outlined in the last audit.

More than a million Marylanders are enrolled in Medicaid. The auditors did not determine how many people, if any, received benefits to which they were not entitled.