You might think ensuring that Obamacare enrollees are real people would be a bipartisan cause, but these days there can be no reduction in the rolls — no matter how legitimate — without demagoguery.
Vice President JD Vance announced Tuesday that his anti-fraud task force is canceling about 760,000 enrollees of zero-premium health plans under the Affordable Care Act and performing additional verification for another 419,000 accounts. The federal government expects to save an estimated $2.2 billion this year with the disenrollments.
But Senate Minority Leader Chuck Schumer (D-New York) said online that the move will “kick hundreds of thousands more people off their health insurance.” Former House speaker Nancy Pelosi (D-California) wrote on social media that “using the false pretext of fighting fraud to strip Americans of their healthcare is as cynical as it is cruel.”
Except that’s not what’s happening. The Centers for Medicare and Medicaid Services tell us that every removed account was signed up by an agent or broker — not the enrollee — and met four additional criteria.
First, none of the accounts had a Social Security number or an immigration identification number. Second, all of the accounts had premiums covered 100 percent by taxpayers. That makes it easier for fraudsters to sign up unknowing enrollees, who don’t see money leave their bank accounts. Third, the plans had not been used. No claims had been filed. And finally, the insurer offering the plan never had contact with the enrolled individual.
Even if the account met all of these requirements, the insurer was still required to reach out to the individual via two forms of communication. Only when insurers received no response after 30 days was the account removed, according to CMS. Insurers had strong incentives to reach these people because the companies were receiving premium payments from the government for each account.
It’s also important to note who is not affected: No enrollee who has used an Obamacare plan this year, signed up individually for a plan or lives in one of 21 states with its own exchange is losing coverage.
If legitimate enrollees are mistakenly caught up in the sweep, there’s an easy fix. Anyone incorrectly disenrolled can contact the Marketplace Call Center, provide a Social Security number or immigration document number and be reenrolled, according to CMS.
Fraud grew rampant in recent years because the Biden administration increased Obamacare enrollment by expanding eligibility for zero-premium plans while failing to perform sufficient due diligence. That created a cottage industry of unscrupulous intermediaries, who received commissions from the government for signing up phantom “customers.”
A Government Accountability Office report last year showed how easy it has been to defraud Obamacare. Auditors submitted 24 fake applications for subsidized coverage, and 23 were approved. A June report by the Paragon Health Institute, a conservative think tank, estimated that 6.2 million people are improperly enrolled in ACA plans. If that’s right, Vance’s group has only scratched the surface.
Federal prosecutors have uncovered organized Obamacare fraud operations. A Florida insurance brokerage pleaded guilty earlier this year for its role in a scheme to fraudulently enroll people in subsidized plans. Two men received 20-year prison sentences for a scheme in which the federal government paid at least $180 million in subsidies for fraudulent enrollments.
Money given to scammers is money that doesn’t help needy people receive health care. Democrats should wholeheartedly support throwing the book at these criminals. Minimizing the scale of abuse undermines public confidence in the safety net.
Large-scale waste and fraud is an inevitable consequence of removing market forces from health care in the United States. Charging even a modest monthly premium for all ACA plans would ensure that the people who sign up for them are real.
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