In keeping with its pledge to rein in the soaring cost of health care in the United States, the Trump administration issued a new rule to clamp down on improper enrollment in Obamacare.
The Centers for Medicare and Medicaid Services issued “The 2025 Marketplace Integrity and Affordability Final Rule” on June 20. The rule will reverse Biden-era policies that allowed millions of ineligible people, including illegal immigrants, to obtain coverage under the Affordable Care Act (ACA).
“CMS is restoring integrity to ACA Exchanges by cracking down on fraud, protecting American taxpayer dollars, and ensuring coverage is there for those who truly need it,” said CMS Administrator Dr. Mehmet Oz in a statement. “This is about putting patients first, stopping exploitation of the system, and realigning the program with the values of personal responsibility and fiscal discipline.”
Stricter Verification Policies
The rule ensures people who need and qualify for Obamacare are the ones getting it, says Oz.
“We estimate that over 4 million people may have been improperly enrolled in 2024—many not even knowing they were enrolled or that their plan changed,” Oz wrote on X.
The new rule addresses the “monthly special enrollment period” used by brokers and agents to enroll people without their authorization, to gain commissions. Enrollees will have to provide income verification for subsidies and will no longer be able to wait until the last minute to enroll for coverage.
The CMS will improve verification of people receiving advanced payment of premium credits and starting in 2027 there will be one designated enrollment period for all plans, with enrollees being encouraged to keep their coverage for the entire year.
Sticking to Statute
Additionally, the CMS will stick more closely to the statutory requirements and goals of the ACA, stated the June 20 news release. The agency will prohibit the use of federal subsidies “to help cover the cost of specified sex-trait modification procedures to align an individual’s physical appearance or body with an asserted identity that differs from the individual’s sex.”
CMS will also revert to a 2012 interpretation of the statute, requiring enrollees to be “‘lawfully present’ to exclude Deferred Action Childhood Arrivals (DACA) recipients from eligibility and enrollment in ACA Exchange coverage and Basic Health Program (BHP) coverage in States that elect to operate a BHP, including APTC, premium tax credits, and cost-sharing.”
Widespread Fraud Identified
The Trump administration’s crackdown on Obamacare fraud arrives in the wake of the Paragon Health Institute’s recent landmark study, “The Great Obamacare Enrollment Fraud.”
“Overall,” the study found, “fraudulent exchange enrollment appears to be a severe problem in nearly half the states. We estimate that fraudulent enrollment at 100 percent to 150 percent [of federal poverty level incomes] is likely upwards of four to five million people in 2024. We estimate, conservatively, that this cost will likely be upwards of $15 to $20 billion this year.”
Middle-Income Cheaters
Obamacare has demonstrated fraud is not limited to one income bracket, says Merrill Matthews, a health policy analyst and columnist for The Hill.
“Liberals constantly complain about wealthy people hiding money to avoid taxes, but are silent about middle- and lower-income families hiding income so as to qualify for means-tested programs like Obamacare,” said Matthews.
“Worse yet, blue states typically don’t want to expose the fraud,” said Matthews. “Blue-state governors want the uninsured numbers to be as low as possible, in part so they can criticize mostly red states with higher uninsured numbers. So, if blue-state residents are defrauding the ACA by being enrolled when they are not qualified, why should those governors care?”
It happens because states have little skin in the game, says Matthews.
“ACA fraud doesn’t cost [these] states anything, and it makes their uninsured numbers look better,” said Matthews. “Indeed, since most Democrats prefer a government-run health-care system, there is very little incentive for them to seek out ACA, Medicaid, or Medicare fraud.”
Looking the Other Way
The new rule is no surprise, says Craig Rucker, president of the Committee for a Constructive Tomorrow.
“Fraud in government-run health-care systems has been rampant for years, with little effort made to get at the root of the problem,” said Rucker. “To the left, the goal is a single-payer system, with the government [taxpayer] being the single payer. By aggressively exposing ACA fraud, as well as fraud in Medicare and Medicaid, the Trump administration is chipping away at the whole government-run health-care enterprise.”
Bonner Russell Cohen, Ph.D., ([email protected]) is a senior fellow at the National Center for Public Policy Research.
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
