GOP leaders call for investigations into alleged Affordable Care Act fraud

“The scale of the problem suggests malicious intent,” Reps. Cathy McMorris-Rodgers (R-Wash.), Jason T. Smith (R-Mo.) and Jim Jordan (R-Ohio) wrote in their letters, asking a “systemic review of registrations” by watchdog agencies. The three lawmakers are chairs of the Energy and Commerce, Ways and Means, and Judiciary committees, respectively.

The accusations focus on a report from the Paragon Health Institute, a conservative think tank, which concluded that as many as 5 million Americans may be wrongly receiving ACA insurance subsidies. Paragon's report compared census estimates of the number of Americans potentially eligible for these subsidies with the level of enrollment in the ACA.

The allegations are also fueled by recent KFF Health News reports about unscrupulous brokers falsifying information to enroll clients or wrongly switching plans for clients without their consent, a development that has sparked bipartisan anger.

The Centers for Medicare and Medicaid Services recently announced that the agency received about 90,000 complaints about unauthorized enrollments or plan switches in the first quarter of 2024. While brokers benefit from these measures by receiving commissions, unauthorized enrollments or plan switches can harm consumers, and federal health officials have said they are cracking down on brokers’ behavior.

Democrats share some concerns about possible fraud, with Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, recently demanding more enforcement measures to protect consumers.s unscrupulous brokers.

The attention to potential fraud in the ACA comes as lawmakers continue to grapple with the health law and how to fund its programs. Democrats have welcomed enrollment through the ACA, with President Biden emphasizing during Thursday night's debate that more than 40 million Americans are covered by its insurance marketplaces and Medicaid expansion.

Republicans countered that the program's purpose had been distorted and that Democrats had been too generous in providing federal subsidies to private health insurance.

Under the American Rescue Plan Act and the Inflation Reduction Act, people with income between 100 and 150 percent of the federal poverty level are eligible for enhanced subsidies that reduce their premium to zero for a plan with very low out-of-pocket payments, also known as a zero premium plan. A household of four, for example, could report an income of between about $30,000 and $45,000 to qualify for these enhanced subsidies. These enhanced subsidies are set to expire in 2025, and Republicans have been reluctant to extend them, sparking a fight in Congress.

Nearly half of the people who bought private health insurance during the recent ACA enrollment period reported incomes that qualified them for a fully subsidized or no-premium plan, compared with about a third before the enhanced subsidies. Paragon’s report argues that individual enrollees, insurance brokers, and private health insurers all have financial incentives to take advantage of these subsidies, and that no one has bothered to look closely at why the use of these subsidies is increasing.

“It's astonishing how little has been done so far on these issues,” Brian Blase, president of Paragon and former Trump White House health policy official, said in an interview. .

Other researchers and health policy experts said they doubt Paragon's findings.

Edwin Park, a research professor at Georgetown University’s McCourt School of Public Policy, said he supports federal investigations into broker behavior and other sources of potential enrollment fraud. But he cautioned that Republicans have repeatedly raised fraud allegations as a way to attack the Affordable Care Act and other health programs.

“Beneficiary fraud has always been a small part of all fraud and abuse in programs like Medicaid,” Park said.

He also criticized the Paragon report for relying on “a relatively simplistic methodology” that failed to account for critical differences between census estimates and ACA enrollment data.

Asked about his report's findings, Blase said he was confident.

“I don’t think these are allegations. I think it’s about data,” he said.