Pennycuick Introduces Measure to Stem Fraud in State Health Insurance Program

Today, Senator Tracy Pennycuick (R-24th) introduced legislation to address improper enrollment, waste, and fraud in Pennsylvania's Health Insurance Exchange Authority called Pennie.

Senate Bill1439, the Reducing Fraudulent Pennie Claims bill enhances fraud identification within Pennie by requiring documentation for enrollment to include proof of residency or documented proof associated with the individual's intent to reside in the Commonwealth. Additionally, the legislation will require the establishment of an Office of Fraud Prevention within Pennie to solely focus on identifying and combatting fraud before it takes place.

The measure has strong bipartisan support and mirrors language adopted by the state House of Representatives, on June 9th, and represents common-sense provisions to ensure the state takes every necessary step to prevent consumers from experiencing higher insurance costs due to fraud on the state exchange.

"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 state Senate Banking and Insurance Committee revealed that enrollment fraud has been a problem for years, facing both federal and state-based ACA exchanges, such as Pennie. In fact, the committee reported that for insurers offering plans on Pennie, $19.6 million was paid out in fraudulent claims in 2025 alone. Even more troubling, they identified approximately $163.6 million in fraudulent claims billed against insurers for 2026.

A recent report from Paragon Health alleged that Pennsylvania had more than 21,000 improper enrollments. At a June 5th meeting with Pennie officials, presenters noted that the cancellation of fraudulent policies had increased dramatically due to a sophisticated fraud scheme. In one case, an insurer had to review more than 4,500 policies for potential fraud.

Tackling fraud in our health insurance marketplace is critical to protecting consumers and the taxpayers who pay for subsidized healthcare.