WASHINGTON, June 20, 2024 /PRNewswire/ — Paragon Health Institute, a leader in health care research and market-based policy proposals, has released alarming findings from an analysis of Obamacare subsidy beneficiaries. Using a combination of government data related to enrollees claiming 100 percent to 150 percent of the federal poverty level (FPL), Paragon found the number of Obamacare subsidy recipients for this income bracket exceeded by millions the number of Americans who actually qualify for this assistance. Paragon’s findings are reported in The Great Obamacare Enrollment Fraud, where fraudulent enrollment is estimated to be five million people in 2024 representing waste of about $20 billion in tax dollars a year.
The Affordable Care Act provides large financial subsidies for lower-income Americans to purchase health insurance coverage in Healthcare.gov and other state-run health insurance marketplaces known as “exchanges.” The subsidies are composed of the Premium Tax Credit (PTC), which lowers the monthly cost of coverage, and the CSR Program, which lowers the out-of-pocket costs. President Biden signed the American Rescue Plan Act of 2021 (ARPA) and the Inflation Reduction Act of 2022 that increased the PTCs through 2025. As a result of these laws, people claiming income between 100 percent and 150 percent of the FPL pay $0 for benchmark plans (i.e. the second-lowest-cost silver plan) from a health insurance exchange. Additionally, enrollees claiming this income range enjoy the benefit of insurance paying a greater portion of covered medical expenses, reducing the enrollees’ out-of-pocket expenses.
Paragon identified nine states (Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Texas, and Utah) where the number of sign-ups reporting income in the 100-150 percent FPL range exceeded the number of residents in this earning bracket. The over-subsidization problem is particularly acute in Florida, where there were four times the number of exchange enrollees reporting 100-150 percent FPL income as there were eligible Floridians. This misstating of income is more than twice as common in states using HealthCare.gov as opposed to a state-based exchange.
Some brokers are certainly contributing to fraudulent enrollment and the enhanced direct enrollment feature of HealthCare.gov appears to be a problem. Brokers just need a person’s name, date of birth, and address to enroll them in coverage, and reports indicate that many people have been recently removed from their plan and enrolled in another plan by brokers who earn commissions by doing so. Unfortunately, brokers are not alone in financially benefitting from fraudulent enrollments. Health insurers are also reaping windfalls from these improper enrollments.
Brian Blase, former official on the White House’s National Economic Council and founder of Paragon Health Institute, observed, “Affordable Care Act subsidies are being exploited so health insurers and brokers enjoy more income while hard-working Americans pay for it. At this time of profound economic pressures facing the nation, Obamacare subsidies need better oversight and accountability.”
Launched in late 2021 by Brian Blase, Paragon Health Institute provides health policy research as well as market-based policy proposals for improved outcomes in the public and private sectors. Journalists and health care analysts can review Paragon’s latest studies and commentary at paragoninstitute.org.
Contact:
Anthony Wojtkowiak
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703.527.2734
SOURCE Paragon Health Institute
