Trump Administration’s Obamacare Fraud Crackdown Draws Democratic Opposition

More than a dozen Democratic senators are criticizing the Trump administration’s efforts to address the problem of . In a letter to insurers, the senators accuse the companies of “colluding” with the administration to terminate coverage for more than 760,000 enrollees. Their criticism gets insurers’ financial incentives backward and overlooks the extensive safeguards the employed before terminating these highly suspicious enrollments.

Insurers have little incentive to drop phantom enrollees. For years, insurers have been the biggest beneficiaries of the expanded Obamacare subsidies — reaping tens of billions of dollars in higher subsidies. By making millions of plans free to consumers, Democrats created powerful incentives for improper and phantom enrollment. Given these incentives, the administration was right to scrutinize suspicious enrollments.

Key Takeaways

Phantom enrollments reward insurers and unscrupulous brokers while leaving taxpayers to foot the bill.
Renewing Obamacare subsidies risks reviving fraud incentives.

More than a dozen Democratic senators are criticizing the Trump administration’s efforts to address the problem of . In a letter to insurers, the senators accuse the companies of “colluding” with the administration to terminate coverage for more than 760,000 enrollees. Their criticism gets insurers’ financial incentives backward and overlooks the extensive safeguards the employed before terminating these highly suspicious enrollments.

Insurers have little incentive to drop phantom enrollees. For years, insurers have been the biggest beneficiaries of the expanded Obamacare subsidies — reaping tens of billions of dollars in higher subsidies. By making millions of plans free to consumers, Democrats created powerful incentives for improper and phantom enrollment. Given these incentives, the administration was right to scrutinize suspicious enrollments.

About the Author

Brian Blase

Brian Blase is the president of the Paragon Health Institute. He was special assistant to the president for economic policy at the White House’s National Economic Council, 2017–19.