NE Washington News

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 Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), House Ways and Means Committee Chair Jason Smith (R-MO), and House Judiciary Committee Chair Jim Jordan (R-OH) are calling for systemic reviews of Obamacare enrollment to determine the extent of improper enrollment and its underlying causes.

The letters follow the release of a paper from Paragon Health Institute, which estimates that four to five million people are improperly enrolled in fully-subsidized Obamacare plans at an annual cost of $15 to $26 billion to taxpayers.

"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," states a key excerpt from the letters. "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."

The letter highlights that a significant feature of this expansion increases subsidies for insurance companies so that American taxpayers cover the full cost of premiums for individuals with incomes between 100 and 150 percent of the Federal Poverty Level (FPL). This policy is often referred to as “zero-premium” plans. According to the letter, regulatory actions by the Biden administration have eliminated program integrity controls in federal exchanges, such as prohibiting key eligibility verification procedures. This appears to have created incentives for individuals and brokers to misstate enrollees’ income to place them in benchmark plans receiving maximum subsidies.

The letter notes that individuals enrolled within this income cohort nationwide exceed the total number likely eligible. The issue seems particularly severe in certain states, with some reporting hundreds of thousands or even millions more enrollees than reasonably expected. More than half of all enrollees in federal exchanges now report incomes between 100 and 150 percent FPL—significantly higher than the historical average of roughly 40 percent—indicating widespread enrollment discrepancies.

While acknowledging that individuals may reasonably misestimate their income at any point, the scale suggests potential malicious intent from certain actors involved. Documented issues include broker behavior surrounding these “zero-premium” plans, with reports detailing practices where consumers had their plan switched without consent.

Estimates show that improperly enrolled individuals in “zero-premium” plans cost between $15 billion and $20 billion per year, potentially reaching as high as $26 billion annually. If accurate, these improper payments could represent more than half the cost required for making expanded subsidies permanent.

"Runaway deficits and debt are threatening to breach historic levels in the next decade," states another part of the letter. "By 2054, simply servicing our national debt will more than double relative to Gross Domestic Product (GDP), crowding out other important national priorities." The Chairs emphasize it is critical for federal government resources to be safeguarded efficiently.

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