TL/DR –
Republican leaders in the House are pushing for a probe into alleged fraudulent enrollments and wrongful distribution of subsidies via the Affordable Care Act. The allegations originate from a report by the conservative think tank, the Paragon Health Institute, which posits that up to five million Americans could be wrongly receiving subsidies. The call for an investigation also follows reports of insurance brokers dishonestly altering client plans and a rising number of complaints regarding unauthorized sign-ups or plan switches.
House GOP Leaders Call for Investigation into Alleged ACA Enrollment Fraud
House Republican leaders have requested that Government Accountability Office and the Department of Health and Human Services’ inspector general investigate potential fraudulent activities in the Affordable Care Act (ACA) health insurance sign-ups. The allegations highlight the possibility of insurance brokers enrolling customers inappropriately and individuals illegitimately benefiting from federal subsidies.
Key Republican lawmakers, including Reps. Cathy McMorris-Rodgers, Jason T. Smith, and Jim Jordan, have voiced concerns over a potential “astonishing level” of enrollment fraud, requiring a “systemic review of enrollment.”
An analysis by the Paragon Health Institute, a conservative think tank, further fueled these concerns. Their report concluded that potentially five million Americans could be incorrectly receiving ACA subsidies.
The concerns rise from recent reports of brokers potentially falsifying information or switching customers between plans without consent. The KFF Health News has covered these issues, stirring bipartisan concern.
The Centers for Medicare and Medicaid Services has reported approximately 90,000 complaints of unauthorized plan switches or sign-ups in early 2024. These moves could disadvantage consumers while benefitting brokers through commissions.
Not just the Republicans, but Democrats like Sen. Ron Wyden, chair of the Senate Finance Committee, have also called for more enforcement against unethical brokers.
The allegations surface amidst continued disagreements over the ACA’s funding and function. The Republicans argue that the Democrats have overly promoted private health insurance through federal subsidies.
The American Rescue Plan Act and the Inflation Reduction Act enable households earning 100-150% of the federal poverty line to qualify for premium-free plans with minimal out-of-pocket costs. This provision, set to expire in 2025, has the Republicans protesting its extension.
According to the Paragon report, half of the recent ACA enrollees reported incomes that made them eligible for a fully subsidized plan, up from a third before the subsidies’ enhancement. The report suggests potential misuse of these subsidies by individuals, brokers, and private health insurers.
However, several researchers and health policy experts have expressed doubts about Paragon’s conclusions, remarking on the need to investigate brokers’ actions and other potential fraud sources. They also stress that beneficiary fraud typically constitutes a small fraction of overall fraud in programs like Medicaid.
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