The Democrats are pretending this shutdown is about your health care.
It’s not—it’s about fraud.
They want you to believe the sky is falling—your health care is going to double in cost (or go away completely, depending on the day), and low-income ObamaCare enrollees are going to get left out in the rain.
These are scare tactics, designed to cover up for the proposal they’re really pushing: an extension of temporary COVID-era subsidies, riddled with fraud they’d rather not admit exists.
As many Americans know, ObamaCare operates by households purchasing health insurance through the exchange. Based on the enrollee’s income, the insurance premium is offset by a federal subsidy, paid directly from the government to the insurer. In nearly every case, this results in a big discount on the monthly premium.
In 2021, President Biden and Democrats in Congress included a massive sweetener to these ObamaCare credits at every income level, including those making hundreds of thousands of dollars.
For as many as half of ObamaCare enrollees, that meant a $0 out-of-pocket premium, fully covered by the taxpayer subsidies. This, predictably, led to a surge of enrollments—and very real incentives for fraud and bad actors.
That’s because ObamaCare isn’t just individual people logging on to find health insurance. Today, nearly 80 percent of all ObamaCare enrollees are signed up by an insurance agent or broker, who receive a commission for every sign-up. Their incentives are clear—sign up as many people as possible, no matter what it takes. The result: a blind eye turned toward eligibility; unwanted or unrequested insurance changes; and insurance that the taxpayers are funding but the recipient doesn’t need.
The Wall Street Journal recently exposed some of the deceitful tactics used by brokers to trick low-income Americans into signing up for these plans: fraudulent Facebook and Snapchat ads, empty promises of gift cards, and even agents switching enrollees’ plans without their knowledge. According to the Journal, “CMS has received more than 208,000 complaints this year of unauthorized ACA insurance sign-ups,” and 200 agents and brokers have been suspended on suspicion of fraud.
A shocking number of these customers never even use the health care they signed up for.
In 2024, a full 40 percent of fully subsidized (zero premium) enrollees had no health care claims whatsoever. No annual visit, no blood work, no prescriptions, nothing.
These “no-claim enrollees” are an ongoing profit stream for the insurance company paid by the taxpayers—at least $35 billion for people who pay zero and never use their plan.
During the housing market bubble of the early 2000s, unscrupulous mortgage brokers made a killing selling mortgages to “NINA” and “NINJA” borrowers: “No Income, No Asset” or “No Income, No Job, No Asset.” The broker’s incentive in this case, again, wasn’t about verification of eligibility or long-term consequence—it was sales, no matter who they were sold to. When these mortgages understandably failed and the housing market collapsed, hindsight made it clear how dangerous those loans were and how predatory these brokers were.
But the Democrats created a system to bring those same mistakes to health care. In the same way that unscrupulous mortgage lenders didn’t bother with verification, ObamaCare brokers have the same incentives today—boosted by the extra subsidies the Democrats just shut down the government to protect. And once again, the taxpayers have to bail them out in the end.
Today, as many as 6.4 million ObamaCare enrollees are receiving zero-premium plans they aren’t eligible for, at an estimated fraud cost of $27 billion per year. A staggering 1.6 million are also enrolled in Medicaid at the same time as ObamaCare, meaning the taxpayers are paying twice for health coverage the recipient may not even be using.
Most Republicans rightly want these temporary credits to expire as intended. They are backed by an overwhelming majority of voters from every party: Republican (67 percent), Democratic (67 percent), and Independent (66 percent).
And for the real people stuck in the middle of this government showdown, the real-world result is nowhere near the Democrats’ “sky is falling” rhetoric. When these credits return to pre-COVID levels, households at the poverty level will still have 98 percent of their monthly premium cost covered, paying about $3.45 a week on average in premiums.
This is hardly the first COVID-era program to expire according to the Democrats’ own sunset date. The Democrats didn’t shut down the government to protest the end of the Paycheck Protection Program, or enhanced unemployment benefits, or the Restaurant Revitalization Fund. So why won’t the Democrats allow these enhanced COVID-era credits to expire?
Maybe it’s because they know that ObamaCare doesn’t work without massive subsidies, so they don’t want to give an inch. The Washington Post recently hit the nail on the head: “The real problem is that the Affordable Care Act was never actually affordable.”
Maybe it’s because this subsidy hits all three of the Democrats’ biggest issues today: ObamaCare, COVID spending, and opposition to Trump.
No matter what is really behind the Democrats’ shutdown, the truth is clear.
The Democrats shut down the government to protect fraud—not your health care.
Maggie Harrell is the Federal Affairs Director at the Foundation for Government Accountability.
The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.
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