FROM WASHINGTON EXAMINER: Republicans in Congress are facing mounting pressure from both sides of the aisle about whether to extend additional Obamacare premium tax credit subsidies as part of legislation to avoid a government shutdown this fall.
The popularity of the added Obamacare marketplace subsidies, which former President Joe Biden and Democrats passed during the height of the COVID-19 pandemic as a temporary measure, could make it difficult for Republicans to let them expire by January without facing blowback during the 2026 midterm elections.
But conservatives argued that there is systemic fraud in the Obamacare insurance marketplace through the extended subsidies and are calling on President Donald Trump and the GOP to let the credits expire back to pre-pandemic levels.
The 2021 and 2022 legislation, passed by Democrats, enhanced Obamacare subsidies. Now, premiums for recipients between 100% and 150% of the federal poverty line are eliminated. The legislation also significantly lowered premiums for those under 400%.
After the change, Obamacare coverage with subsidized plans nearly doubled, going from 12 million when the plan was enacted to 24 million this year.
But without the subsidies, consumers face a steep rate hike.
“The average consumer could pay 75 percent more for an Affordable Care Act marketplace health plan, driven by the expiration of federal subsidies and higher health premiums, according to an analysis by nonpartisan health policy organization KFF,” the Washington Post reported.
According to the NPR, “Congress could also act before December to blunt the effect on enrollees, although the Republican lawmakers who control Congress have shown little interest in extending the subsidies. An extension of the tax credits was left out of President Trump’s tax and spending law passed in July.“
One reason for the GOP’s resistance was explained in a press realease by U.S. Sen. Chuck Grassley (R-Iowa), in which he details how fraudulent enrollments have occurred due to “exploited vulnerabilities in the ACA’s design.” It says:
U.S. Sen. Chuck Grassley (R-Iowa), a senior member and former chairman of the Senate Finance Committee, is renewing calls for accountability after receiving information that builds on independent reports of widespread Obamacare fraud. In 2024, taxpayers reportedly footed the bill for approximately $20 billion in improper Obamacare subsidies. This number could exceed $27 billion in 2025. Based on information provided to Grassley’s office, insurance agents are also using targeted internet advertisements to fraudulently enroll consumers with false income verification extension requests.
Outrageously, insurance brokers can fake the incomes of people in order to enroll them in the government-subsidized plans when they aren’t eligible for them. Sometimes the enrollees don’t even know it happened because the government pays the monthly premium subsidies directly to the insurers.
Grassley explained one of these fraudulent schemes: “This scheme involved targeted internet advertisements for free health insurance. These advertisements were used to entice consumers to fill out a webform with personal information which was then used by insurance agents to sign consumers up for healthcare in targeted zip codes. Those zip codes were in states that use the federally-facilitated marketplace (FFM), rather than state-based exchanges, and where preferred insurance companies had $0 premium plans. Using information from the webforms, agents used HealthSherpa, one of the ten federally-approved private sector ACA federal marketplace enrollment websites, to sign consumers up. During open enrollment periods, agents entered hundreds of applications per day and if the consumer noted on the webform that their income wasn’t between 100-150% of the federal poverty level (FPL), agents would fraudulently swap it out for a number to obtain maximum ACA federal marketplace plan premium subsidies and special enrollment period (SEP) eligibility. To keep fraudulent enrollments on the books for as long as possible, agents allegedly submitted false income verification extension requests and prepopulated income explanation forms rather than submitting actual proof of income.”
Grassley’s press release states that he “pushed for answers from top leaders in the Biden administration regarding their efforts to eliminate waste, fraud and abuse in the ACA marketplace,” but they failed to respond.
Grassley wrote, “The Biden administration’s failure to adequately oversee these subsidies has had expensive consequences … The Wall Street Journal reported that in 2024 five million consumers may have inappropriately received health insurance coverage through subsidized Affordable Care Act (ACA) federal marketplace plans based on falsified income information, which may have cost the taxpayer an estimated $20 billion.”
The press release goes on to congratulate President Donald J. Trump’s Department of Justice (DOJ) for their February 19th indictment of Cory Lloyd and Steven Strong for engaging in a $161 million ACA enrollment fraud scheme.
“Grassley applauds the Trump administration’s program integrity measures through the marketplace integrity and affordability rule. The One Big Beautiful Bill also established some additional premium tax credit program integrity measures,” the release says (emphasis added).
The Paragon Health Institute released a report that said the fraud has gotten worse in 2025. The Paragon Health Institute is a non-partisan think tank founded by former Trump administration official Brian Blase, which promotes free-market and patient-centered solutions to reform government healthcare programs and lower costs. The organization conducts research, develops policy proposals, and produces publications on various health policy topics.
Paragon reported (emphasis added):
Exchange enrollment fraud is driven by a combination of four factors: (1) the enhanced Obamacare subsidies, enacted as a temporary pandemic-era policy, which fully subsidize plans for people who report income between 100 and 150 percent of the FPL; (2) Biden administration policies that prioritized enrollment over eligibility verification and program integrity; (3) limits on how much the federal government can recover if insurers receive excess advance subsidies because of improper eligibility determinations; and (4) automatic re-enrollment, which perpetuates improper enrollments year after year.
We also found that improper exchange enrollment significantly increased from 2024 to 2025. We estimate, conservatively, that improper enrollment—defined as enrollees who claimed, but did not actually have, income between 100 and 150 percent FPL—increased from 5.0 million enrollees in 2024 to 6.4 million enrollees in 2025. We estimate that the taxpayer cost of improper enrollment will exceed $27 billion this year. Under more expansive and likely realistic assumptions, improper enrollment reaches 7.1 million people.
More than half of exchange sign-ups during the 2025 open-enrollment period in HealthCare.gov states reported income between 100 percent and 150 percent FPL, qualifying for fully-subsidized, 94 percent actuarial value plans. The percentage of people signing up who report income in this range has increased substantially since the enhanced subsidies took effect. Among enrollees reporting income between 100 and 150 percent FPL in HealthCare.gov states, we estimate that 62.3 percent are not eligible. In other words, for every two eligible enrollees in this income category, there are more than three who are ineligible.
In 29 states, the number of sign-ups reporting income between 100 percent and 150 percent FPL exceeds the number of potential enrollees.
The problem is particularly acute in Florida, where we estimate there are nearly five times as many enrollees reporting income in that range as residents who are actually income-eligible. In 14 other states—Arizona, Georgia, Indiana, Louisiana, Michigan, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, and Utah—there are more than twice as many enrollees as eligible individuals.
In all states, there is an incentive for people who have income between 200 and 400 percent of the FPL to report income between 100 and 150 percent of the FPL. First, they qualify for a larger advance subsidy and a plan with much lower cost-sharing. Second, the Internal Revenue Service only recoups a small portion of the excess subsidy when they file their taxes.
Nearly 12M ObamaCare enrollees never used their coverage last year—many signed up through fraud. Taxpayers foot the bill while insurers cash in. Democrats call it a success, but it’s a subsidy scam.https://t.co/8SBrpqLzJn
— Steve Forbes (@SteveForbesCEO) August 18, 2025
The information listed is from WashingtonExaminer.
