Washington, D.C. — In new letters to the Department of Health and Human Services (HHS) Inspector General and Government Accountability Office (GAO) Comptroller General, House Ways and Means Committee Chair Jason Smith (R-MO), House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), and House Judiciary Committee Chair Jim Jordan (R-OH) ask for systemic reviews of Obamacare enrollment to determine the breadth of improper enrollment and its underlying causes.
The letters come following the release of a paper from Paragon Health Institute, which estimates that 4 to 5 million people are improperly enrolled in fully subsidized Obamacare plans at a cost of $15 to $26 billion per year to taxpayers.
KEY EXCERPT FROM THE LETTERS:
The Democrat-passed tax-and-spend laws 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. Recently, the Congressional Budget Office (CBO) estimated that making those subsidy levels permanent would add nearly $400 billion to the deficit on top of the hundreds of billions in existing Obamacare spending.
A key feature of this expansion increases subsidies for insurance companies such that the full cost of premiums for individuals with incomes between 100 and 150 percent of the Federal Poverty Level (FPL) is paid for by American taxpayers, often referred to as “zero-premium” plans. This policy, coupled with the Biden administration’s regulatory actions to eliminate program integrity controls in the federal exchanges, such as prohibiting key eligibility verification procedures, appears to have created both the incentive and opportunity for individuals and brokers to misstate enrollees’ income to place them in benchmark plans receiving the maximum subsidy.
Individuals enrolled in this income cohort nationwide exceed the total number of potentially eligible individuals. This problem appears to be particularly acute in certain states, with some 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 now report incomes between 100 and 150 percent of FPL—notably higher than the historical average of roughly 40 percent—further demonstrating the breadth of the enrollment incongruity.
While individuals may reasonably misestimate their income at any given point, the scale of the problem suggests malicious intent from certain actors involved. There have been documented issues with broker behavior surrounding these “zero-premium” plans, with reports and litigation detailing practices of consumers having their plan switched by such brokers without their consent.
Estimates show the cost of improperly enrolled individuals in “zero-premium” plans are $15 billion to $20 billion per year and potentially as high as $26 billion per year. If these estimates are accurate, it implies that these improper payments represent more than half the cost of making the expanded subsidies permanent.
Runaway deficits and debt are threatening to breach historic levels in the next decade, and, by 2054, the cost of simply servicing our national debt will more than double relative to Gross Domestic Product (GDP), crowding out other important national priorities. Given this grave situation, it is critical that the federal government safeguard increasingly scarce resources to ensure that every dollar spent goes as far as possible to improve Americans’ wellbeing.
CLICK HERE to read the letter to HHS Inspector General Christi Grimm.
CLICK HERE to read the letter to GAO Comptroller General Gene Dodaro.