New Report on ACA Fraud Shows It’s Time to Fund Patients, Not Insurance Companies

Jul 3, 2024 by AFP

Arlington, Va. – Americans for Prosperity (AFP) today commented on a new report showing that between 4 and 5 million people are improperly enrolled in fully subsidized plans through the Affordable Care Act (ACA) at a cost of $15 to $26 billion per year to taxpayers.

The report, issued by Paragon Health Institute, revealed that the number of people with incomes between 100 and 150 percent of the Federal Poverty Level (FPL) enrolled in fully- subsidized ACA plans – meaning, plans with premiums fully paid for by taxpayers – exceeds the total number of potentially eligible individuals.

The fraud problem is fueled in part by huge enhancements of the subsidy program enacted in 2021, compounded by lax enforcement.

The findings underscore the perils of any policy that funnels tax dollars to a third party to offer health coverage. Insurers are disinclined to rigorously prevent fraud because more enrollees means more subsidies.

“This report should serve as a wakeup call to lawmakers that it’s time to fund patients, not insurance companies,” said Dean Clancy, senior health policy fellow at Americans for Prosperity. Patients need more choices than what the status quo offers and taxpayers deserve a health care system that prevents fraud. Congress should provide every American with a Personal Option that puts people and families – not third-party middlemen – in control of health care.”

AFP applauds House Ways and Means Committee Chair Jason Smith (R-MO), House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), and House Judiciary Committee Chair Jim Jordan (R-OH) for asking the Biden administration to investigate the improper ACA enrollments.

One such reform that prevents fraud in health care by funding patients instead of insurance companies is H.R. 5608, the HSA ACCESS Act. The bill, sponsored by U.S. Reps. Greg Steube and Kat Cammack, would allow roughly 5 million people enrolled in ACA plans to put a portion of their share of cost-sharing reduction subsidies into a tax-advantaged health savings account (HSA). Enrollees who voluntary choose this HSA Option could use their HSA funds to purchase medical items and services directly, including those not covered by their insurance, giving them greater access to needed care. These funds, which could only be used for health care expenses, would allow individuals to determine the best health care decisions for themselves and their families.

By empowering Americans with control of their health care dollars, policies like the HSA ACCESS Act create more choices, drive down costs through greater competition, and safeguard taxpayers against fraud.

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