WASHINGTON-Vice President JD Vance's antifraud task force is removing hundreds of thousands of enrollments from the Affordable Care Act's public exchanges, saying those enrollees don't meet eligibility requirements or don't exist at all.
Tuesday's enforcement action, directed by the Vance-led White House Task Force to Eliminate Fraud, represents one of the largest administrative purges targeting individual insurance exchanges since the Trump administration's crackdown on fraud began last year.
Vance and Dr. Mehmet Oz, the administrator for the Centers for Medicare and Medicaid Services, or CMS, announced Tuesday that they are canceling subsidy payments for allegedly unauthorized and fraudulent enrollments in the ACA, also known as Obamacare, for 760,000 individual accounts. They say those cancellations would amount to saving an estimated $2.2 billion in taxpayer funds.
"We're actually making sure that the people receiving Obamacare subsidies are actually entitled to receive them, amazingly we weren't doing that before," Vance said.
Vance said those enrollments include people who are unaware that they are enrolled in the program, are ineligible for the program because they have employer-provided healthcare or earn an annual income greater than 400% above the federal poverty level. The Department of Health and Human Services sets the federal poverty level at $15,650 for one person or $32,150 for a family of four.
As a candidate, Joe Biden campaigned on expanding access to the healthcare law that was passed while he was a vice president in 2010. During the Covid-19 pandemic, his administration did so through two main budget bills that added incentives for people to sign up and temporarily expanded subsidies to help low-income and middle-income families. When the pandemic ended and states began tightening Medicaid eligibility for tens of millions of people, the administration created $0-premium ACA plans for people who were cut off from Medicaid.
During the Biden administration, Obamacare enrollment increased from approximately 10 million to more than 22 million.
A HHS report from earlier this year estimated that nearly half of new Obamacare sign-ups from 2021 to 2024 were likely improper, phantom or fraudulent. CMS estimates, for instance, that more than a million enrollees signed up for the benefit without providing a Social Security number.
Democrats lumped the announcement into past healthcare cuts that Republicans have advocated. The tax bill they passed last year made cuts to Medicaid that Republicans said would result in tougher crackdowns on fraud and abuse.
"Families need coverage they can afford and count on when they get sick. Vance's task force won't accomplish that," said Brad Woodhouse, president of left-leaning advocacy group Protect Our Care. "It's a smokescreen for an administration whose sole mission is to make it harder to get and stay covered but to shower billionaires with tax breaks instead."
Cynthia Cox, a senior vice president at KFF, a healthcare research nonprofit, said some of those losing their coverage might have been legitimately enrolled. "We don't know how much of this is collateral damage," she said.
Democrats' provision in the Covid-era budget bill that lifted income caps expired at the end of last year, despite calls by the party and some Republicans to continue them.
CMS also announced that it is cutting off hundreds of brokers and agents who signed people up for government healthcare and issuing a nationwide moratorium on all new agents and brokers, who are paid by insurance companies and can receive up to $25 a month for each new enrollee.
Administration officials said some brokers have taken advantage of this and signed individuals up for healthcare without checking identification. Federal law allows CMS to block agents from the exchange, or blacklist them.
"These crooks bribed homeless and jobless people into enrolling in the ACA plans," Oz said, while standing behind a picture of an alleged fraudster who said he had a "punchable face."
Administration officials said 40 agents and brokers generated 50,000 fake enrollments, costing the government $45 million.
CMS has already cut off 66 agents from the system and plans to terminate 469 more, according to administration officials.
CMS is planning to check the immigration status and income eligibility of 415,000 current enrollees. Federal regulators are also ending a Biden-era policy that officials said permitted enrollees to continue receiving monthly subsidies even after declining to supply mandatory identity and eligibility documentation.