Conservative group alleges 6M fraudulently enrolled in ACA

BY DAN D IAMOND The Washington Post

An influential conservative think tank is contending that 6.2 million enrollees on the Affordable Care Act’s health insurance exchanges— roughly a quarter of all enrollees — improperly received health coverage this year through the program.

Paragon Health Institute, which is led by a former economic aide to President Donald Trump and has influenced the current administration’s health policy moves, also argues that the federal government could wrongly subsidize the ACA program by $25 billion this year. The organization bases its latest analysis on publicly available enrollment and Census Bureau data, arguing that it is impossible for so many people to qualify for subsidies to purchase ACA coverage given their reported income levels.

The analysis, which Paragon plans to publicly release Wednesday and is likely to be sharply disputed by Democrats and other policy groups, is the latest salvo in the political fight over health insurance coverage, an issue that has helped decide past elections and could play a role in this fall’s midterms.

Trump has also spent years demeaning Obamacare, insisting that the program — the signature domestic accomplishment of President Barack Obama — is a source of government overreach and fraud. ACA enrollment, which shot up under President Joe Biden, has shrunk by more than 1 million people since Trump took office and is expected to fall by millions more this year.

Democrats and some health policy experts have argued that Trump’s polices, including ending covid-era subsidies that widely lowered the cost of ACA coverage, have forced people off the program and put them at risk of losing access to health care services. Republicans contend that the ACA’s dwindling enrollment is the result of necessary initiatives to cut waste and fraud after Democrats focused on growing the program but did too little to scrutinize who was signing up.

"Obamacare enrollment over the last few years has been inflated by improper and phantom enrollees, and those enrollees are expensive to the taxpayer," Brian Blase, Paragon’s founder, said in an interview. He pointed to states across the South, such as Florida and Texas, as places where the alleged fraud was concentrated, saying that were too few controls on people signing up for the program.

"The problem is more severe in states that did not expand Medicaid, because in those states there’s incentives to overestimate income and claim a subsidy," Blase said.

The Centers for Medicare and Medicaid Services (CMS), which oversees the program, estimated that up to 4.4 million enrollments in 2024 may have been improper, a spokesperson told The Washing-ton Post.

Democrats and some health policy analysts have said that Paragon’s past allegations about ACA enrollment fraud were inflated. A federal judge appointed by Biden threw out a federal health insurance rule drawing on Paragon’s analysis, calling it flawed.

Experts have also warned that the Trump administration’s push to crack down on waste and fraud is having deleterious effects on the social safety net.

"Certain administration officials are throwing around the term ‘fraud’ as a way to justify policies that make it more difficult for eligible people to apply for and maintain their insurance coverage," Sabrina Corlette, a professor at Georgetown University’s Center on Health Insurance Reforms, wrote in an email. "That’s essentially like trying to solve a rash of car thefts by making it more difficult for people to buy cars."

But Paragon’s work has sparked GOP-led probes in Congress and empowered Republicans eager to defend the party’s health policy agenda ahead of this year’s midterm elections. Several former Paragon staffers serve as senior economic and health officials in the Trump administration.

Trump on Monday nominated Ge Bai, a Johns Hopkins University accounting professor and past Paragon adviser, to serve as an assistant secretary at the Department of Health and Human Services.

The White House’s new fraud task force is also planning to investigate ACA enrollment fraud among its potential targets, administration officials told The Post.

Some Democrats critical of Paragon’s findings have conceded that there are bad actors seeking to profit from the ACA marketplaces, such as brokers who wrongly sign up people for plans they don’t need.

"There is clear evidence that, in 2024, rogue brokers improperly enrolled or switched the enrollment of a few hundred thousand people without their permission," Jason Levitis, a senior fellow at the Urban Institute and a former Obama policy official, testified to the Senate Finance Committee in November.

The Government Accountability Office in December released a report that also concluded the ACA faces persistent fraud risks. "For example, we were able to get subsidized insurance for fake enrollees," GAO wrote.

CMS has cited Paragon’s work when issuing new, more restrictive eligibility rules for ACA enrollment. CMS Administrator Mehmet Oz praised the organization’s "pioneering work" in an interview with Blase in April, with the former surgeon saying that he agreed with Paragon that there was "massive fraud" in the ACA program and significant changes were needed.