The story of every government subsidy reads like this: Offer people handouts if they can meet specific requirements, and suddenly, plenty of people — meet the criteria.
When you cover the entire cost of something — mainly if it’s something costly like health insurance — the number skyrockets.
That is precisely what is happening in the instance of ObamaCare subsidies President Joe Biden and fellow Dems generously expanded, with shoes receiving handouts surpassing the number entitled to them, found a new report by Paragon Health Institute.
The inappropriate claims cost U.S. taxpayers an estimated $15 billion to $26 billion per year, prompting House GOP to demand a review by the Government Accountability Office and Health and Human Services inspector general to determine “the breadth of improper enrollment and its underlying causes.”
Legislation passed by Democrats and President Joe Biden “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 GOA and HHS officials stated.
That includes eligibility expansion for completely free ObamaCare policies to individuals making up to 150 percent of the federal poverty level—an incentive researchers at Paragon found has sparked as many as five million individuals to “improperly” claim income below the 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.”
So, what’s the result? Some states have been 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 makes it “notably higher than the historical average of roughly 40% for these plans.”
The fraud “appears to be a significant problem in nearly half” states. Researchers discovered that it’s “much more severe” in states that decided not to adopt ObamaCare’s Medicaid expansion and those that use the federal exchange.
HealthCare.gov reports 8.7 million signups, although only 5.1 million people are “likely eligible.”
Ironically, this fraud is mainly in red states: Florida, Mississippi, Alabama, Georgia, South Carolina, Utah, Tennessee, North Carolina, and Texas. In states like California and New York, fraudsters are more likely to target generous Medicaid programs instead.
Researchers with Paragon offer numerous recommendations to curb the “waste, fraud and abuse” — like reversing Joe Biden’s policies that enable “widespread fraudulent enrollment, particularly the “continuous open-enrollment period for people” and claiming income lower than the threshold.
However, none of its suggestions are as crucial as allowing the Biden-era “enhanced subsidies” to potentially expire next year. Subsidies already total almost $40 billion a year—part of the $2 trillion in federal outlays annually for health care.
They are also clearly an invitation for fraud.
In the meantime, the feds are spending $2 trillion more this year than they are taking in, a deficit of 7% of GDP—almost double the 3.7% rate over the past 50 years.
Trimming that gap by as much as $26 billion a year won’t halt all the bleeding, but it’s a significant start.
