Obamacare Fraud Cost Taxpayer Billions Since 2021

More than 15 years after it was passed by the Obama-Biden administration, the ravages of Obamacare continue to pop up around the country and rip the pockets of the hardworking American taxpayers. Recently, the Congressional Budget Office (CBO) reportedly admitted the loss of billions of dollars to fraud associated with Obamacare’s subsidy structure.

The Federalist (September 19) explained how the enhanced Exchange subsidies, passed by Democrats in 2021, became a magnet for fraudulent claims by people on either side of the poverty level at which they could get enrolled for free health coverage – in other words, to get covered using taxpayer’s money. The story cited CBO’s response to a question about the amount of fraud in Obamacare’s subsidy structure that the Democrats still want to expand some more:

The agency has, however, specifically estimated that 1.3 million marketplace enrollees improperly claimed the premium tax credit [i.e., subsidies] via intentional overstatement of income for 2023; 2.3 million enrollees did so for 2025.

The story underscored the point that this is the first time the CBO has made such an admission though independent analyses have previously determined the estimated damage caused by such fraud. The Paragon Health Institute, for example, estimated in an analysis this year that some $27 billion were lost to Obamacare’s Exchange fraud by approximately 6.4 million people who fraudulently enrolled under the program. Of these, about 2.3 million enrollees have been improperly enrolled this year.

In August 2024, Brian Blase and Gabrielle Kalisz of the Paragon Health Institute published a report titled “Unpacking The Great Obamacare Enrollment Fraud.” It estimated fraudulent exchange enrollments in the enhanced subsidies program to be between 4 and 5 million people with an estimated $15-26 billion of cost to the taxpayer that year. It also identified two main reasons for a sharp rise in such fraudulent claims during the Biden administration.

First, the federal government under Biden increased subsidies for people in the exchange plans. The report called it “the most generous cost-sharing subsidies for enrollees who claim income between 100 percent and 150 percent of the federal poverty level (FPL).”

Secondly, the Biden administration failed to adopt “common-sense program integrity protocols” that would safeguard against fraudulent claims. As the report put it:

This atmosphere rewards dishonest enrollees for lying on applications and gives unscrupulous brokers (and insurers) the opportunity to make considerable profits by enrolling people or switching peoples’ plans, often without the consent or knowledge of the enrollees.

It will be no surprise to confirm that such lack of oversight is actually intentional and a part of the long-known Democrat policy of incentivizing fraud. The Federalist had a golden rule, taught by the late Nancy Reagan, for Republican lawmakers to follow when it comes to such fraudulent schemes: “Just say no.”