Measure to combat Pennie fraud approved by Senate committee

The following information was released by the Pennsylvania State Senate, Republican Caucus:

The Senate Banking and Insurance Committee today advanced legislation aimed at combating fraudulent enrollment and protecting the integrity of Pennsylvania's health insurance marketplace, according to committee chair Sen. Chris Gebhard (R-48).

Senate Bill 1439, sponsored by Sen. Tracy Pennycuick (R-24), would target fraud, waste and abuse within Pennie, Pennsylvania's state-based health insurance marketplace. The Reducing Fraudulent Pennie Claims Act would require applicants to provide proof of residency or documentation demonstrating their intent to reside in Pennsylvania. The legislation would also establish an Office of Fraud Prevention within Pennie dedicated to identifying and combating fraud.

"The amount of fraud identified within Pennie is troubling and highlights the need for greater safeguards and accountability," Gebhard said. "As health insurance premiums for plans on Pennie rose by more than 14%, it's deeply concerning that prior to this year Pennie did not have dedicated staff to prevent fraud on the exchange. For too long, this administration allowed fraud to continue unfettered, and that failure ultimately helped to make healthcare even less affordable for Pennsylvanians."

Enrollment fraud has affected both federal and state Affordable Care Act exchanges, including Pennie. According to information presented to the committee, insurers offering plans through Pennie paid approximately $30 million in fraudulent claims since October 2024, with more than $163.6 million in fraudulent claims billed to insurers this calendar year alone.

"Tackling fraud in our health insurance marketplace is critical to protecting consumers and the taxpayers who pay for subsidized healthcare," said Pennycuick. "Strong safeguards are not barriers to access they are essential protections that ensure benefits are available for eligible Pennsylvanians while preserving the integrity and long-term sustainability of the program."

The measure has strong bipartisan support, mirroring language adopted by the House of Representatives on June 9, and ensures the state takes every necessary step to prevent consumers from experiencing higher insurance costs due to fraud.

The measure now heads to the full Senate for further consideration.