Healthcare Fraud Reaches Crisis Levels as Obamacare Subsidies Face Expiration

The facts are clear: Obamacare’s expanded COVID-era subsidies have become a taxpayer-funded bonanza of fraud and waste, and Democrats want to extend them anyway.

These subsidies are set to expire on December 31, and Democrats are scrambling to renew them despite the fact that doing so would cost American taxpayers hundreds of billions of dollars over the next decade. Republicans, correctly, want to let these subsidies lapse and pursue actual healthcare reform. The question is not whether these subsidies should expire. The question is why they existed in the first place.

According to Ryan Long, Senior Research Fellow at the Paragon Health Institute, the expanded subsidies have created zero-dollar insurance plans that have become vehicles for massive fraud. The numbers are staggering. Approximately 6 million people are claiming credits for income categories they do not actually fall into. In certain states, enrollment in these zero-dollar plans for people claiming income between 100 and 150 percent of the poverty level exceeds the actual population in those income brackets by three to four times.

The federal government is paying between $27 billion and $30 billion in fraudulent payments. This is not a rounding error. This is systemic failure.

Centers for Medicare and Medicaid Services Administrator Mehmet Oz confirmed the scope of this problem last week. More than 11 million people have Obamacare policies they never use, often because they do not even know they have them. Yet taxpayers are footing the bill for all of it.

The fraud is only part of the problem. Obamacare is making health insurance dramatically more expensive for everyone. Since 2013, Obamacare plan premiums have increased by 169 percent. Compare that to employer-sponsored insurance premiums, which have risen by 68 percent since 2014, while ACA premiums have climbed 129 percent over the same period. This disparity cannot be explained by general healthcare inflation. When the government pays most of the cost, insurers can raise prices without consumers feeling the immediate impact. The result is a system with no incentive to control costs.

Healthcare costs have not decreased. Wait times have not improved. Quality has not increased. So where is all this money going?

Senator Ron Johnson of Wisconsin provided the answer. Insurance companies are making extraordinary profits. UnitedHealthcare, the largest carrier of exchange policies, has seen its stock price increase by 1,177 percent since Obamacare’s implementation. Among the top seven carriers, the smallest stock increase was 414 percent. Large urban hospitals are making money hand over fist while rural hospitals struggle to survive.

The fundamental problem with Obamacare is that it creates no incentives to reduce costs. Every incentive in the system encourages increased spending so that insurance companies, hospitals, and other healthcare entities can maximize their profits. This is not healthcare reform. This is wealth transfer from taxpayers to healthcare corporations.

Democrats want to extend these subsidies permanently, which would entrench this corrupt system even further. The logical course of action is obvious: let the subsidies expire and pursue genuine healthcare reform that reduces costs, increases quality, and does not reward fraud. Anything less is fiscal malpractice and a betrayal of American taxpayers.

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