It’s the story of every government subsidy: Offer folks handouts if they meet certain requirements, and suddenly a lot of people . . . meet the requirements.
Cover the full cost of something — especially it’s something pricey, like health insurance — and the number zooms off the charts.
That’s what’s happening in the case ObamaCare subsidies President Biden and fellow Democrats generously expanded, with those getting handouts actually exceeding the number entitled to them, a new report from the Paragon Health Institute found.
The improper claims are costing American taxpayers an estimated $15 billion to $26 billion a year, prompting House Republicans to demand a review by the Health and Human Services inspector general and the Government Accountability office to determine “the breadth of improper enrollment and its underlying causes.”
Legislation passed by President Biden and fellow Democrats “resulted in tens of billions of additional taxpayer dollars being spent to prop up ObamaCare plans by increasing subsidies given to insurance companies far above those originally authorized by Congress,” their letters to HHS and GOA officials stated.
That includes expanded eligibility for totally free ObamaCare policies to people making up to 150 percent of the federal poverty level — an incentive, Paragon researchers found, that’s spurred as many as 5 million people to “improperly” claim income below that threshold.
To make matters worse, Team Biden has eliminated “program integrity controls,” which “appears to have created both the incentive and opportunity for individuals and brokers to misstate enrollees’ income.”
The result: Some states are now reporting “hundreds of thousands, and, in one case, millions more individuals enrolled in these plans than are reasonably likely to be eligible.”
“More than half of all enrollees in the federal exchange” claim incomes between 100% and 150% of the poverty level, enabling them to qualify.
That’s “notably higher than the historical average of roughly 40% for these plans.
The fraud “appears to be a significant problem in nearly half” the states, the researchers found, though it’s “much more severe” in states that declined to adopt ObamaCare’s Medicaid expansion and in those that use the federal exchange (HealthCare.gov).
HealthCare.gov states report 8.7 million signups, even though only 5.1 million people are “likely eligible.”
Ironically, this fraud’s mainly in red states: Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Texas and Utah. (In states like New York and California, the fraudsters likely target generous Medicaid programs instead.)
Paragon’s researchers offer several recommendations to curb the “waste, fraud and abuse” — such as reversing Biden policies that enable “widespread fraudulent enrollment, particularly the “continuous open-enrollment period for people” claiming income below the threshold.
Yet none of its suggestion are as important as allowing the Biden-era “enhanced subsidies” to simply expire next year. These subsidies already total nearly $40 billion a year — part of $2 trillion in annual federal outlays for health care.
And they’re clearly an invitation for fraud.
Meanwhile, Uncle Sam is spending $2 trillion this year more than it’s taking in, a deficit of 7% of GDP — nearly double the 3.7% rate over the past 50 years.
Trimming that hole by as much as $26 billion a year won’t stem all the bleeding but it’s definitely valuable start.
