On January 1, the day that Obamacare's primary insurance coverage expansion mechanisms kicked in, former Health and Human Services Secretary Kathleen Sebelius submitted a letter to the president.

On the very first page of the letter, Sebelius personally certified that Obamacare's health insurance exchanges "verify that applicants for advance payments of the premium tax credit and cost-sharing reductions are eligible for such payments and reductions" as required by the law. "When a consumer applies for insurance affordability programs, including advance payments of the premium tax credit and cost-sharing reductions, the Marketplace [the exchanges] verifies application information provided by the consumer" in order to assess eligibility.

In short, when people apply for Obamacare's health insurance subsidies, there's a robust, reliable system in place to check their documentation and determine whether or not they are really eligible.

But as it turns out, there isn't. Not really. Not one that actually works, or even really attempts to work.

Undercover investigators from the Government Accountability Office (GAO) spent some time this year attempting to see if it would be possible to get subsidies using false application information. They set up fake names and Social Security numbers that aren't real, then claimed citizenship or legal residence, according to the AP, which obtained an early copy of the GAO report. They submitted applications with income amounts that should have been too high to get subsidies. In other words, they fed the system blatantly fraudulent information that should have been swiftly rejected.

But the majority of their attempts were successful anyway (the AP says 11 of 18; The New York Times reports 11 of 12). Indeed, the agency is still paying its share of the premiums on those accounts, because the Obama administration, which certified the validity of its subsidy verification system, just a few months ago, hasn't caught on to the fraudulent accounts yet.

The GAO did not rely on complex schemes or trickery. Instead, they called, or went online, and worked through the application process. Of the six telephone attempts that the agency attempted, five went through. The lone rejection occurred when the GAO investigator refused to supply a Social Security number at all. Several attempts that were initially blocked online were later approved over the phone.

The details of the report strongly suggest that there is in fact no meaningful system in place to check and verify application information. The federal contractor supposedly in charge of weeding out fraudulent applications told the GAO that "it does not seek to detect fraud and accepts documents as authentic unless there are obvious alterations." The contractor also said that because applicants supply copies of their paperwork, it cannot determine their authenticity.

The AP article suggests that the possibilities for fraud are limited because individuals cannot themselves access the funds paid for subsidies. But even still, the program is clearly susceptible to abuse by people who do not qualify for subsidies under the law. And neither the administration, which wants to sign up as many people as possible regardless of actual eligibility, nor the insurers, which get paid for each person who signs up, have much of an incentive to make the system work better.

The upshot, then, is this: Not only did the administration not set up a working verification system, they lied about it and said they did.

(And, obviously, this is completely aside from questions about the legality of issuing subsidies in the federally run exchanges.)