A senior Democratic senator is leading an effort to pass legislation designed to cut down on a particular kind of health care fraud — and, in the process, to shore up the Affordable Care Act.
On Wednesday, Sen. Ron Wyden (D-Ore.) introduced a bill to stop brokers who sell “Obamacare” insurance from engaging in a series of deceptive of fraudulent practices, like luring customers with misleading advertisements or enrolling people in plans without their full consent.
When that happens, people can discover they are on the hook for higher out-of-pocket costs than they expected, or that they have more limited access to providers and drugs. In some cases, people end up owing back taxes because they unwittingly got financial assistance the federal government makes available based on income — and for which they were not eligible.
The legislation would impose new civil and criminal penalties for such broker behavior, require new auditing procedures and take other steps that go beyond anti-fraud measures the federal government has taken already.
Wyden’s bill has nine co-sponsors, all of them Democrats. Reps. Kathy Castor (D-Fla.) and Deborah Ross (D-N.C.) have introduced a companion version in the House.
But the legislation isn’t just an effort to address a well-documented policy problem. It’s also an attempt to shape a coming political debate about the Affordable Care Act’s future ― and, in particular, how much financial assistance should be available for people who buy insurance through it.
Since 2021, people buying insurance through Obamacare have been eligible for extra subsidies, thanks to a temporary boost President Joe Biden and the Democrats enacted as part of their COVID relief efforts and then, one year later, extended.
That money runs out this year. At that point, the extra subsidies will go away — and insurance will become more expensive — unless President Donald Trump and Congress decide to extend the assistance in some form.
Neither Trump nor the Republican lawmakers in charge of Congress have said much about the issue. But conservatives have argued against extension, citing not just the overall cost (somewhere between $30 billion and $40 billion a year in federal expenditures, based on Congressional Budget Office estimates) but also what they say is widespread waste and fraud in the program.
Their solution is to let the provision of the enhanced subsidies lapse, as planned, on the theory that extra money gives brokers ― and individual consumers ― more incentive to exploit or defraud the system.
“The only way to meaningfully reduce waste and fraud is for Congress to permit the enhanced part of the subsidies to expire,” Brian Blase, a former Trump administration official who is now president of the Paragon Institute, wrote in a newsletter last year.
But without those additional subsidies in place, premiums would be higher and several million more people would go without insurance altogether, according to CBO and otherindependentanalysts.
Citing that possibility, Wyden and his colleagues say the federal government should keep providing the enhanced subsidies ― perhaps through a bill Democrats introduced earlier this year ― while focusing anti-fraud efforts on the “rogue brokers.”
“The best way to fight fraud is to go after fraudsters,” Wyden said in a prepared statement. “Republicans have been talking a lot about waste, fraud, and abuse lately ― this legislation is a great place to start rather than taking away health insurance from working Americans and increasing premiums for millions of families.”
“If President Trump and Congressional Republicans were serious about addressing fraud in our health systems, they would support this critical legislation,” said Ross.
Trump Is Already Making Obamacare Changes
It’s not clear when ― or if ― Republican leaders in Congress will take up this issue. But this week the Trump administration took some steps toward changing the Affordable Care Act on its own, through executive action: It proposed to reverse Biden-era rules that made Affordable Care Act enrollment easier, especially for lower-income Americans.
If the Trump proposal becomes final, the open enrollment period for Affordable Care Act insurance will be shorter, while people signing up for coverage will have to provide more information about their income status.
The Trump proposal would also undo a Biden decree making so-called “Dreamers” ― undocumented immigrants who came to the U.S. as young children ― eligible to buy subsidized coverage through the Affordable Care Act.
A Trump administration press release described this proposed rollback of the Biden rules as “critical and necessary … to protect people from being enrolled in Marketplace coverage without their knowledge or consent, promote stable and affordable health insurance markets, and ensure taxpayer dollars fund financial assistance only for the people the ACA set out to support.”
Among those who see it differently are Sabrina Corlette, a research professor at Georgetown University.
“Under this banner of trying to crack down on the bad actions of some insurance brokers, they are penalizing consumers, particularly low-income consumers, with more burdensome requirements and more limits on their access to coverage,” Corlette told KFF Health News, which has done extensive reporting on Affordable Care Act enrollment fraud.
Government estimates suggest that reverting to the old, pre-Biden rules could reduce federal spending significantly ― by between $10 billion and $14 billion a year, the Trump administration said in its press release.
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Of course, government estimates suggest the change could also mean between 750,000 and 2 million people losing health insurance, several critics of administration policy said on social media.
“The rule proposes these changes under the guise of preventing fraud, but punishes enrollees instead of targeting marketplace bad actors,” Sarah Lueck, vice president for health policy at the Center on Budget and Policy Priorities, posted on X. “Federal efforts to address fraud and abuse should target fraud and abuse – not penalize marketplace enrollees.”