The Trump administration plans to cancel health insurance for more than 760,000 people who obtained their coverage through the public exchanges established by the Affordable Care Act, alleging that the individuals are ineligible or do not exist.
Vice President JD Vance, who leads a federal task force focused on rooting out fraud, said Tuesday that the effort would save the government $2.2 billion in healthcare spending.
“We’re actually making sure that the people receiving Obamacare subsidies are actually entitled to receive them,” Vance told reporters at a press conference. “Amazingly, we weren't doing that before.”
Vance said the task force is also checking the eligibility of about 419,000 people who they suspect are fraudulently enrolled in Obamacare plans. “We're going to make sure that they're first of all legal residents of the United States of America, and second of all, we're going to make sure that they actually meet the income threshold requirements in order to receive these Obamacare benefits,” Vance said.
Focus on brokers: Vance blamed the Biden administration for providing incentives to brokers who sign up people for healthcare benefits, saying the system, combined with lax eligibility monitoring, led to “rampant fraud.”
“In one case we found a fraud ring that had 40 agents, 40 brokerage agents who had funneled 50,000 people into the Obamacare system fraudulently,” Vance said. “Now, some of those people were probably legitimate. Most of those people were not eligible [because] either they didn't meet the citizenship or the income requirements. Many of those people quite literally didn't even exist.”
Joining Vance at the press conference, Dr. Mehmet Oz, the administrator for the Centers for Medicare and Medicaid Services, announced a national moratorium on new brokers. “There will be no new brokers for Obamacare in this country for the next six months,” Oz said, adding that a “disproportionate amount of the fraud is taking place from these individuals.”
In a press release, CMS outlined other steps the agency is taking to reduce fraud in the ACA exchanges, including recertifying existing brokers, requiring Social Security numbers for all applicants and blocking brokers and agents from completing forms that are the responsibility of applicants.
By the numbers: About 19 million people receive health insurance through the Obamacare exchanges, so the reduction announced Tuesday amounts to roughly 4% of current enrollment, per The New York Times.
During the Covid pandemic, the Biden administration pushed to expand access to healthcare plans sold on the public exchanges, and total enrollment jumped from about 10 million to more than 22 million. That number started dropping after Congress declined to extend generous subsidies that lowered the cost of insurance for millions of enrollees.
Trump administration officials have claimed that there are still millions of ineligible or fraudulent enrollees in ACA plans. In his comments Tuesday, Oz said he expects to remove more enrollees in the future. “These are not real people,” Oz said. “We're not paying insurance for non-existent ghosts.”