▶ 0:56:10Subcommittee will come to order without objection. The chair is authorized to declare a recess at any time. We welcome everyone to today's hearing. Thank you so much for being here. I know it's been a little unsettling, little crazy in New Jersey vernacular, but uh it is what it is and we do appreciate your time and your presence. I now recognize Dr.
▶ 0:56:32Rand to lead us in the pledge of allegiance and then I ask we remain standing for a moment of I alian to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all.
▶ 0:57:11I will now recognize myself for an opening statement. Today, this committee examines a serious question that affects millions of average everyday Americans every single day. as the Affordable Care Act as written and as implemented allowed waste, fraud, and abuse to flourish while real American families are left to struggle under a system that was supposed to protect them.
▶ 0:57:40This is about real people, real families in every district and every state in this great country. good families who work hard, play by the rules, and yet are still getting crushed by a system that was supposed to help and protect them. It's not fair. It's wrong. And frankly, it's disgusting. The people have done nothing wrong, but politicians have let them down.
▶ 0:58:09And that is the real reason we're here. We're not here, and I want I I almost feel like saying this. I hope I don't have to say it over and over again. We're not here to de debate what a new health care plan may look like. That is under another committee's We are not here to entertain scare tactics about stripping health care away. I really do believe no Republican wants to do that.
▶ 0:58:34So, let me say upfront to my colleagues on the other side, no one should pretend otherwise today. Today we are here to study at, look at, dig deep into and understand particularly what my good friend the chairman of the committee of the whole brought forward when he asked for a GAO investigation into this the government accountability office.
▶ 0:58:57Totally So, we shouldn't distract, we shouldn't dodge, we shouldn't from run from what this non-partisan GAO investigation uncovered. Every time someone tries to change the subject, it sends a message to the American people that defending the current corrupt ACA matters more than defending the families being hurt by it.
▶ 0:59:24The worst thing that we could do is pretend this system is working simply because people rely on it. We shouldn't pretend. Yes, people rely on it, but it's not good. People rely on it because they have no other choice. And very often, we're here to examine the failures of the system that exists right now and right here. And right now, the Nonpartisan Government Accountability Office has revealed the ugly, ugly truth.
▶ 0:59:54They tested the ACA, and the ACA failed. The GAO created fake applicants. Get this. They created fake applicants using fictitious identities, missing documents, and questionable personal information. The system approved them all. Anyway, these imaginary enrolles received tens of thousands of taxpayer dollars month after month even though they didn't exist.
▶ 1:00:22No verified identity, no proof of citizenship, no income documentation, nothing. Nothing at all. Think about this. This was not a partisan Republican This was the non-partisan government accountability office.
▶ 1:00:43Tens of thousands of your hard hardearned tax dollars went sent to identities invented out of thin Fraud doesn't just waste tax dollars. It drives premiums higher for good, honest This is a program that paid out roughly billion last year. That's a big number.
▶ 1:01:09If even a small fraction of that is tied to fraud or improper use, that is a huge number. We're talking about a real national crisis. Let me be clear, and I want to be clear on this, too. I'm not calling for the me personally, I am not calling for this entire system to be torn down overnight. That is not the question for us today.
▶ 1:01:35What we cannot do is make these subsidies permanent forever because the system is already damaging American livelihoods and weakening their health care system. The real question is how we replace it. How we replace it and when we replace it in a responsible way that makes it safe for good Americans. Even with all the problems we have, we have to make it safe. We have to treat our American people properly.
▶ 1:02:05The American people are the victims of this corrupt structure. They deserve a bridge to hold them up while we build something much better. And if a short-term extension, let me be blunt, is necessary, we should be clear about two things with a short-term extension. One, it's it is only to ensure families do not lose their health care in the immediate term. Secondly, the system is not sustainable and cannot serve as a long-term or permanent solution.
▶ 1:02:35Those two things we know we have to take care of the here and now. We have to take care of them if we've got to do something short term with it. But long term, we've got to do much, much better. And keeping it on autopilot with no reforms or accountability is purely negligent. And when you look at the facts of this report, the depths of the the depth of the negligence becomes undeniable.
▶ 1:03:00The nonpartisan Government Accountability Office also found, and boy, get all this, there was no proper verification of income eligibility or accuracy in the payments. You couldn't make this stuff up. The GAO found social security numbers used to enroll multiple people into one account, and they all weren't family. They even found social security numbers that belong to dead people. You can't make it up that were being used. Think about it.
▶ 1:03:30We are letting criminals use dead Americans identities to scam living Americans out of their health care benefits. If a system cannot tell the dead from the living, then for sure it's failing. And yet, insurance companies get paid whether the patient is real or fake, while the family who actually needs care is left fighting denials, delays, and rising premiums. That's the real world. This is a moral failure.
▶ 1:03:59Meanwhile, the Government Accountability Office found that hundreds of thousands of Americans are being switched into plans without their knowledge. Imagine a slick con man calling a vulnerable family and tricking them into a plan they don't want, they don't need, and actually hurts them. And we have that. We have agents and we have them doing that as we speak. That is sad.
▶ 1:04:24It's horrible and it's cruel what these brokers and agents, not all of them, but these fake ones are doing. And the truth is, it isn't just random. The ACA structure has allowed an industry where dishonest brokers can profit from exploiting people's confusion and switching people into plans they never wanted and never asked for. Yet, despite that fact, the CMS received hundreds of thousands of complaints last year from people enrolled or moved without their very consent.
▶ 1:04:55The GAO also noticed that CMS has not updated its fraud risk assessment since 2018. It's simply unacceptable. Today, we will hear from experts. Thank you for being here, who studied how fraud spread through the marketplace. We will hear how insurers profited while families struggled and were hurt. And it's been great for insurance companies.
▶ 1:05:18Man, they've been making money hand And we will assess whether the administrative procedure act is even being applied in a way that prevents meaningful action against the waste, the fraud, and the abuse that plague this system. Our goal is straightforward here today. We must protect those who depend on coverage today. I get it. We must also hold accountable those who exploited them and exploited the system.
▶ 1:05:48And we must build a path forward that delivers affordable, accessible, and accountable care for our American people. Because a health care system cannot function when the rule of law is just optional, just optional for agencies, but somehow it's mandatory for With that being said, I now recognize the ranking member, Miss Crockett. Thank you so much, Mr. Chair.
▶ 1:06:18And um I must tell you that as you spoke, my little pen got to going as well as a couple of other people up here because you said something to the effect of slick con man calling and tricking people. I thought that was profound. Um because it seems like that's how we got into this mess. A slick con man has tried to convince people that healthc care should not be available to everyone.
▶ 1:06:46And that's why right now there are millions of Americans that have no understanding of what will happen. They don't know if they are going to lose their health insurance or not. And frankly, after the big ugly bill was passed, we know that there's going to be a minimum of 17 million people that will lose their coverage. But let's talk about these subsidies because that's what we're here to talk about today.
▶ 1:07:11In a matter of days, Americans across the country will either begin paying thousands of dollars more per month for health insurance or losing their coverage entirely. In fact, more than people, all of whom live in districts represented by Republicans on this committee, will lose their coverage entirely. 25,000 of Chairman Jordan's constituents will lose coverage. 30,000 of Chairman Van Drew's constituents will lose coverage.
▶ 1:07:3920,000 of Chairman Fitzgerald's constituents will lose coverage and they have the opportunity right now to sign the House Democrats discharge petition to force a vote to extend the Affordable Care Act tax subsidies for three years. I appreciate that the chairman said that he doesn't feel like it should be permanent.
▶ 1:07:58I appreciate that it sounds like the chairman also did not have a fix, but what the chairman did not say is whether or not he would sign the discharge petition, which is only asking for an extension. And considering the fact that the last time I checked, the House, the Senate, and the White House are run by Republicans. Hopefully within the next three years, they could actually find a plan. But nevertheless, I invite my colleagues on the other side of the aisle to do right, not by my constituents, but by their own.
▶ 1:08:29Instead, they've called this performative hearing to try to distract the American people from what is about to hit them. The fact that they have sold out their constituents because Donald Trump and their billionaire donors told them to do so. Their fake concern for fraud, waste, and abuse, and their talking points on lowering the cost of living, well, it's all BS. every single bit of it. They gave these billionaires permanent tax cuts and they are sacrificing the average American to pay for it.
▶ 1:08:58They cancelled grants that schools were using to improve student outcomes. They stole resources that farmers and rural communities used to expand local food systems. They took resources from preschool and early childhood education programs. They dismantled programs that helped tackle homelessness and assist seniors. They eliminated medical research grants that have helped thousands of people battling cancer and Alzheimer's.
▶ 1:09:24They've done all that, but won't even help their constituents see a doctor, buy food, pay rent, or pay for child care. They're okay with corporate socialism. But if you're a teacher or a police officer or a student or a sanitation worker, if you're living paycheck to paycheck, if you can't afford child care, if you can't pay your rent, if you can't feed your children, if you can't afford to pay for college, if you're struggling with medical debt, well,
▶ 1:09:54you're so in Trump's America. Congressional Republicans don't believe they have the responsibility to look out for their constituents. They've been reckless. They've been a reckless rubber stamp for Donald Trump, who doesn't even believe that there is an affordability crisis. In fact, he thinks affordability is quote a hoax.
▶ 1:10:15While their constituents were lining up by the hundreds at food banks across the country, the president was literally mocking workingclass Americans at his Great Gatsby themed Halloween party. These people have shown us what they prioritize, and it isn't stopping fraud, waste, or abuse. In fact, President Trump has pardoned criminals who have stolen more than a billion dollars from Americans.
▶ 1:10:43The only thing they care about is making the rich richer at the expense of their own constituents. That's been Donald Trump's focus, and congressional Republicans have gone along with it. So this hearing is nothing more than another Republican attempt to dismantle the Affordable Care Act. It's performative to distract your attention away from the fact that they don't have a health care plan, just concepts of one. And I do want to make sure that I cover one other thing that the chairman spoke about.
▶ 1:11:12He specifically said that he's concerned about the fraud. He's not giving us numbers, but I can give you some numbers. If we're concerned about how much money it may be costing us because systems are not perfect, we have no perfect systems. We have always had some level of fraud in anything that we have because there's no such thing as perfection walking on this earth.
▶ 1:11:38But what I can tell you is that I seriously doubt whatever level of fraud it is that the chairman is speaking of, I seriously doubt that it amounts to the over $200 million that the president is trying to line his pockets with of taxpayer dollars because he feels like he's been agrieved.
▶ 1:11:55I can probably tell you that the $40 billion that he sent to I'm sure that that $40 billion is probably an amount that also is a lot larger than the alleged fraud that has taken place. So, if we are going to talk about being fiscally responsible, if we're going to talk about how we can keep people insured, how we can make sure that people are actually going to live to see another day.
▶ 1:12:26And if it's really about a concern about the fraud, then maybe re in the person that is wasting money or deciding that taxpayers should just line his pockets to the tune of up $200 million. And with that, I will yield. I thank the ranking member and just to remind everybody this hearing there's a great number of things we could debate. Love it. I'd love to do it. Maybe we will.
▶ 1:12:50We'll have some colloquies and debates in the future, but we really want to focus on the problems with the ACA as it exists now. And I will get you some numbers as well. With that being said, I will recognize the chairman of the subcommittee on the administrative state regulatory reform and antirust. Boy, you got a long name in your committee. You know that? You're
▶ 1:13:12it's a lot. Mr. Fitzgerald, for an opening statement.
▶ 1:13:15Thank you, Chairman Van Drew, and thank you to our witnesses for being here today. Uh, let me set the record straight. Obamacare is a complete We are a decade and a half into the patent patient protection and affordable care act, a bill that was promised to the American people as a solution to lower health care spending. But patients have not been protected and health care certainly has not become more affordable.
▶ 1:13:41Since Obamacare was fully implemented in 2014, healthc care premiums have risen 129% over three times the rate of inflation during the same period. Additionally, premium subsidies have risen right along with the premiums. In 2014, subsidies cost the taxpayers $20 billion. In 2025, that number ballooned to 130 billion and 110 billion increase in 11 years.
▶ 1:14:11So, if patients and taxpayers have not benefited from Obamacare, who has? Well, unfortunately, it's the large insurance companies. Since Obamacare was signed into law, the weighted average of health insurer stock prices are up over a,000%, far exceeding the S&P 500 during that period.
▶ 1:14:30In an even smaller time period since the creation of enhanced premium tax credits in 2021, the joint economic committee pointed out that quote, "The Biden COVID premium subsidies do more to improve the financial outcomes of large health insurers than to reduce health care costs for Americans." The reality is Democrats created a boondoggle that has funneled billions of taxpayer dollars directly from the US Treasury to large health insurance companies while at the same time
▶ 1:15:00added hundreds of billions to our national debt, delivered few results for the American people, and drove premium and premium subsidy costs far beyond And yet, Democrats demand that we keep injecting hundreds of billions of dollars into the very system they told us would make healthc care more affordable, despite clear evidence that throwing more money at their failed system is producing harmful results for Americans.
▶ 1:15:30Wisconsin Common Sense will tell you that trying the same action over and over again while expecting a different result is insane. Aside from the insanity of Democrats position on extending Obamacare premium subsidies, let's talk about the subsidy program or the complete lack thereof. The enhanced subsidies have given rise to rampid fraud. As we'll hear from Mr.
▶ 1:15:55Bagdoyan, the GAO found significant instances of fraud in the premium tax credit program.
▶ 1:16:03The system allows insurance companies to effectively get away with stealing from the treasury. Brokers are paid by insurance companies for each enrollment and are therefore incentivized to enroll as many people as possible. Whenever a person is enrolled or switches their plan, the health insurance company receives a subsidy and the broker receives a kickback from the health insurance company.
▶ 1:16:28GAO found that in 2023 there were over 7,000 instances of an already deceased person enrolling in a subsidized health insurance plan. The GAO has also found in 2023 there were over 19,000 instances of a dead person's social security number being used to enroll a living person in a subsidized health insurance.
▶ 1:16:51In total, for just one year, the GAO found $21 billion in unreconciled And that number only includes citizens using social security numbers. It doesn't include non-citizens who receive subsidized care.
▶ 1:17:10Independent research by the Paragon Health Institute estimates as many as 6.4 4 million enroles misrepresented their income to qualify for the full subsidized Obamacare Paragon estimates the cost to taxpayers from this improper enrollment will exceed 27 billion in 2025 alone. This is not incidental.
▶ 1:17:35It is systematic risk to a program that has been ripe for abuse from day one. I'm sure our witnesses will elaborate further on that point. Thankfully, Republicans have taken action to combat this Obamacare fraud and HR1. Republicans ensured only US citizens could receive premium tax credits.
▶ 1:17:58We also removed the cap on repayments to the federal government for excessive subsidies and added stricter eligibility verifications to ensure people do not receive generous subsidies before their eligibility is determined. Also, in June of this year, the Trump administration, Department of Health and Human Services issued a rule meant to combat waste, fraud, and abuse in Obamacare subsidies.
▶ 1:18:23The rule would have gone into effect on August 25th, 2025, but a Biden appointed federal judge issued a stay that prevented most of the fraud protection measures in the rule from going into The judge's opinion was legally and factually ridiculous.
▶ 1:18:43The Trump administration rule would have required individuals enrolled in fully subsidized plans to confirm their eligibility or pay a $5 fee.
▶ 1:19:00But this judge decided that this easily avoidable fee constituted an illegal The judge also criticized Paragon data analysis and said the CBO study, excuse me, cited, "We're too old." We now know that the CBO's analysis is up to date, consistent across the history of Obamacare and consistent with Paragon's analysis.
▶ 1:19:30In closing, let me just say that Republicans are committed to real reforms that would lower premiums and give patients more choice over their Some of our witnesses are prepared to discuss solutions that could do just But Obamacare as a whole, it's broken. After 15 years, it's broken. Despite generous taxpayer subsidies, it has not made healthc care more affordable.
▶ 1:20:00It has not shown evidence of a program that has any integrity. And it has only further enriched large health insurance companies. It is truly the unaffordable care act. Now is the time to wheel our health care system back into the operating room and perform surgery. not continue putting billions of dollars and useless band-aids on a failed system. Thank you, chair, and I yield back.
▶ 1:20:30I now recognize the ranking member of the full committee, uh, Representative
▶ 1:20:36Thank you very much, Mr. Chairman, and thank you to all the witnesses for joining us today. In three weeks, the ACA tax credits expire. So, we've got a simple choice in Congress. We can give millions of American families more affordable health insurance by extending the ACA tax credits or we can force on them drastic premium increases. That's the choice.
▶ 1:21:02Any other rhetorical exercise today is a diversion and a My colleagues want us to change the subject. They want to talk about the problem of fraud, the perennial problem of fraud. There are lots of things we can say about that and maybe we can make some progress on it, but that's a completely different issue. 15 years ago, the ACA passed.
▶ 1:21:27And this historic achievement gave millions of Americans who'd been priced out of health care um actual access to health insurance and to life-saving medical care. With enhanced premium tax credits passed by Democrats, coverage became more affordable for tens of millions of people who did not have access to health care. But now, President Trump and our colleagues want to turn the hands of the clock back.
▶ 1:21:55They want to make health insurance more expensive for the American people. They want to allow tax credits for health insurance, to expire. They have a solution to the affordability crisis in America, which they call a con job and a Democrat hoax, but which hundreds of millions of Americans live with every day. And their solution is to increase health insurance premiums for 22 million Americans by 75% on average.
▶ 1:22:24And for many Americans, their monthly premium payments are doubling or tripling. A 60-year-old in my district who makes $82,000 a year will see their premium increase jump from $581 to $1,552. A stunning 167% increase.
▶ 1:22:43A person making the same salary in our distinguished chairman Jordan's district will see a 248% jump in insurance rates with a month monthly in premium increasing from $581 to $222. Thanks to the Kaiser Family Foundation for breaking these down according to congressional districts so members of Congress can understand what's about to happen to our own people.
▶ 1:23:10While our people are looking at working with no health insurance, sending their kids to school with no health insurance, trying to avoid getting the measles under the leadership of Secretary Kennedy at HHS with no health insurance, our colleagues [snorts] just say, "Let them pack the emergency rooms. Let them take two conspiracy theories and call me in the morning." So, we talk about healthc care for Americans and they changed the subject to talk about fraud.
▶ 1:23:40That's an old trick. When we talk about Social they talk about fraud. When we talk about Medicare, they talk about fraud. When we talk about Medicaid, they talk about fraud. All because they oppose these programs for the people. Not the fraudulent parts created by criminals who we need to chase down and prosecute, but rather the fairness parts created by Congress for the American people.
▶ 1:24:06So now we talk about extending health insurance and they want to talk about fraud. Well, why does President Trump have any standing to lecture anyone about fraud? Think about that for a second. He was criminally convicted by a unanimous jury of his peers on 34 different felony counts of falsifying business records to conceal illegal payments he made. He was found guilty of defrauding the state of New York by lying about real estate values.
▶ 1:24:36And he owes hundreds of millions of dollars in ill-gotten gains to the people of New York. But now he wants to distract us from their sweeping attack on the health care rights of the people by claiming to be enemies of fraud. What a joke. The president just used his pardon power to commute the sentence and forgive the fines of a guy, a fellow criminal convict who defrauded the government of $1 billion by exploiting nursing homes and other senior care health facilities.
▶ 1:25:06One of the biggest frauds ever committed in the history of the United States. He pardoned more than a dozen criminals who stole hundreds of millions of dollars from Medicare and Medicaid from the American people. He pardoned criminals who abused elderly patients and subjected them to unnecessary treatments that were described by the prosecutors in those cases as horrific and barbarian. And if anyone wants to challenge me on any of these facts, I will read to you from the cases. I will give you the documentation.
▶ 1:25:36You might prefer not to look at who Donald Trump is pardoning, but that doesn't mean it's not happening. Not only did he free unrepentant, incarable fraudsters over the last 11 months, he relieved them of their fines and the restitution that they owed to pay their victims. A total right now of more than $1.3 billion and running. Before Trump, all the presidents had made the people actually pay off their fines and their restitution. But not this president.
▶ 1:26:04A few weeks ago, he pardoned the former president of Honduras, Oscar Hernandez, who brought in, check this out, 400 tons, which translates to 800,000 pounds of cocaine, billions of individual doses of cocaine into our country to quote, as the president of Hondur said, to shove up the noses of the gringoes, as he so sweetly put it.
▶ 1:26:32And our alleged America first president pardoned this sick fascist anti-gringo drug dealer while his war secretary was blowing up alleged drug boats and killing 84 people with no declaration of war by Congress and no due process. All allegedly in the name of stopping drugs. What a joke.
▶ 1:26:54President pardoned Ross Olrich, the mastermind behind the dark web platform Silk Road that was used by drug dealers to sell $214 million worth of nar That guy was sentenced to life in prison with no chance of parole. And yet, after Trump pardoned him on day one of his administration, this guy is now back at work, a completely unrepentant criminal and a threat to public safety.
▶ 1:27:20So, we're being lectured by newly minted anti-fraud fighters who utter not a word about any of these pardons of drug traffickers and organized criminals, but people who said nothing when President Trump illegally sacked 17 inspectors general in our government. The very people who are tasked with rooting out fraud, abuse, and corruption in our government. In 2024, they saved $71 billion alone, and they've been sacked denied.
▶ 1:27:50they're not replaced or replaced with a bunch of political hacks. 10 million Americans have already lost their health insurance because of this obscene, ugly bill. A new CMS rule will rip care from 1.8 million Americans. Their plan to kill the ACA tax credit would mean another 4 million American families will no longer have health insurance. Fraud is a criminal wrong and a serious threat to the well-being of our people.
▶ 1:28:16And no one's doing more to stop it than the Democrats who built these programs that the fraudsters are going to jail for ripping off before being pardoned by the convicted fraudster president. Every dollar stolen is a threat to the infrastructure of our safety net. And yes, HHS, the Centers for Medicaid and Medicare Services, DOJ must do a lot more to fight it. We must all fight, not pardon and exonerate the criminals and fraudsters who steal from the American people.
▶ 1:28:45But the way to fight fraud is with targeted anti-fraud measures, not to destroy the public programs that actually serve the American people. They want to get rid of healthcare that we want to protect and we want to get rid of the fraudsters that they want to pardon. Choose your side. I yield back to you, Mr. Chairman.
▶ 1:29:05I thank the ranking member. I'd like to submit for with unanimous consent an article into the record. The article is titled patient protection and affordable care act preliminary results. Uh and it just details the ranking member asked for numbers 19,000 instances of a dead person's social security number being used. 160,000 applications in plan year 2024 that had unauthorized changes through brokers.
▶ 1:29:3266,000 social security numbers in 2024 that were used for over 365 days uh illegally. Uh I could go on and on with the numbers, but I'd like to submit that. I'd also like to say again, I want to remind everybody this hearing is about the Affordable Care Act. If you think it's perfect, if you think there's no fraud, if you think the Government Accountability Office is lying, then you should say so. And I hope that everyone on the other side of the aisle has read this report from one end to the other.
▶ 1:30:02It is a non-partisan report. It's not a Republican report. With that, I recognize the chairman of the full committee, Mr. Jordan.
▶ 1:30:11Uh, thank you, Mr. Chairman. If you like your plan, you can keep your plan. If you like your doctor, you can keep your doctor and premiums will go down. That's what the Democrats told us when they started this thing. They were 0 for three. And now they're telling us, oh, the cliff that they created, which is going to happen in 21 days, if we don't extend the subsidies, the whole world's going to end. Subsidies increase costs. Choice and competition lower costs.
▶ 1:30:40Subsidies drive up premiums. Choice and competition lower premiums. But no, no, no. They just want to keep doing the same thing. Now, look, I understand there's a cliff coming and we should address that. But we should address it in the context of actually doing something that brings down premiums for all Americans. I think they said 12 million, 22 million different numbers. Well, there's 340ome million people in this country who have to deal with healthcare. We'd like the premiums to come down for families all across the nation.
▶ 1:31:07And then they said, I think the ranking member of the subcommittee, the senator from Texas said, there's always some level of fraud. And I think the ranking member of the full committee has talked about perennial fraud. What? What? As if it's okay. Have they not read the report? 21 billion unreconciled subsidies were paid to insurance companies in one year. 7,000 times dead people enrolled. That's a miracle. Holy cow.
▶ 1:31:3619 thou uh 19,000 instances of a dead person's social security number being used to enroll someone who's alive. That's crazy, too. one time, one social security number was used to enroll in 125 policies in different policies in one year. That's phenomenal and that's just perennial. That's just your run-of-the-mill garden variety fraud, I guess, according to the Democrats. Well, we don't think that's the case.
▶ 1:32:05So, we would like to have healthcare where there's choice and competition, where you don't have this kind of fraud, and you don't have these endless subsidies going on forever. so that premiums actually come down for American families. And so I look forward to hearing from our witnesses to talk about those things that will make a difference for the families we all get the privilege of representing. And I yield back. Without objection, all other opening statements will be included in the record.
▶ 1:32:34We will now introduce today's witnesses. Miss Mr. Sto Bigdoyan is a director of audit services in the government accountability offices forensic audits and investigative service division in FAIS. He leads audits of major federal programs focusing on program integrity and risk management issues. Dr.
▶ 1:32:57Brian Blae is the founder and president of Paragon Health Institute, a nonprofit organization that works to improve public and private health. He previously served as special assistant to the president for economic policy on the White House's National Economic Council. Um, Dr. uh G. Bay. Dr.
▶ 1:33:19Bay is a professor of accounting at the John's Hopkins Kerry Business School and professor of health policy and management at the John's Hopkins Bloomberg School of Public Health. Her research uh focuses on healthcare accounting, finance, and policy. and Professor Zack Cooper. Mr. Cooper is an associate professor of public health and an associate professor of economics at Yale University. His research focuses on health care spending and competition in the hospital and insurance markets.
▶ 1:33:49We will begin by swearing you in. Would you please rise and raise your right hand? Do you swear or affirm under penalty of perjury that your testimony, the testimony you're about to give is true and correct to the best of your knowledge, information, and belief. So, help you God. Let the record reflect the witnesses have answered in the affirmative. Thank you. Please be seated. Uh please know that your written testimony will be entered into the record in its entirety accordingly.
▶ 1:34:19We ask you to summarize your testimony in five minutes. Uh Mr. Begoryan, you may begin.
▶ 1:34:26Thank you, Mr. Chairman. Um, Chairman Fitzgerald, Chairman Jordan, Ranking Member Crockett, uh, Ranking Member Rascin. I'm pleased to highlight today initial results of selected aspects from our ongoing review of the ACA APC program. The program's complex structure, high levels of participation, spending, and generally weak controls underly its inherent risks uh for fraud.
▶ 1:34:54In this regard, APC spending totaled $124 billion in 2024, making it highly attractive to fraudsters. To be clear, our review focuses on identifying indicators of potential fraud.
▶ 1:35:11This is very important to understand today in ACA rather than determining the extent of fraud or evaluating its policy or viability Overall, our current bottom line is three-fold. Initial results are consistent with those from similar work over 11 years ago. Risk conditions haven't improved over that time.
▶ 1:35:34In fact, risk risks persist and could be The program faces two principal risks. Integrity risk from ineligible and eligible applicants perpetrating enrollment or subsidy fraud and consumer harm risk from brokers and agents taking unauthorized actions jeopardizing health coverage. More specifically, three principal points are worth noting.
▶ 1:36:02First, CMS's approach to addressing ACA's fraud risks is short on fundamentals. For example, its capacity to manage risks is weak, including a generally lenient posture regarding controls, obsolete and incomplete fraud risk assessments, the latest dates as tw from 2018, and no comprehensive strategy to proactively counter risk.
▶ 1:36:26capacity hasn't kept up with significant program changes, including growth in enroles and spending, frequent shifts in enrollment controls, and the expanding role of brokers and agents in facilitating enrollment. Second, covert testing of our enrollment controls indicates that weaknesses from similar testing over 11 years ago persist.
▶ 1:36:5018 of 20 of our ghost applicants using fake information and documents secured ongoing coverage and subsidies totaling $10,000 a month while many application related discrepancies remain unresolved. Third, extensive data analyses flag multiple indicators of potential fraud. For example, the overused SSN, [clears throat] excuse me, multiple policies attached to a single number.
▶ 1:37:2166,000 instances occurred in 2024 with over 194,000 policies attached to those. That is twice the 2023 level. The most overused SSN from 2023 has 127 fullear and part-year policies attached with annualized subsidies totaling $576,000 matches with SSA's uh full death file deceased
▶ 1:37:52individuals associated with active policies of 58,000 matches in 2023 and partial results show 26,000 subsidies ities carry subsidies totaling $94 million.
▶ 1:38:08No initial evidence of reconciliation of subsidies, social security gaps between pertinent enrollment and tax data suggests that APC's totaling 21 billion in 2023 were potentially not reconciled as required. This represents 32% of all APC's where applicants included SSN and about 23% of total APC spending in 2023.
▶ 1:38:38Also potentially unauthorized broker agent activity or as we call it uh volleying. This involves changes to brokers and agents of record or insurance plans or new coverage initiated all without consumer knowledge or consent. There were 160,000 instances in 2024 that is five times the 2023 level.
▶ 1:39:04Unauthorized changes uh jeopardize coverage and could result in consumer harm. for example, curtailed access to providers or medications. In closing, initial results show ACA's risks persist, undermining program integrity and jeopardizing consumers. However, CMS has not acted decisively and timely to counter them.
▶ 1:39:30CMS must acknowledge risks exist and are immediate, take them seriously, and bolster its capacity to address them. This concludes my opening remarks. Thank
▶ 1:39:42Thank you, Mr. Pegdoyan. Mr. Bla, Dr. Blae, you may begin.
▶ 1:39:46Uh, chairman, Mr. Chairman, Chairman Fitzgerald, Chairman Jordan, uh, ranking members uh, Crockett and Rascin, members of the committee, thank you for the opportunity to testify this afternoon. The failures of the Affordable Care Act are well known. Cancelled health plans, soaring premiums and deductibles, lost doctors, and narrow networks.
▶ 1:40:08The law entrenched an inefficient insurance dominated health sector by sending massive subsidies straight to insurance companies. A new joint economic committee report found that the main winners of the ACA subsidies are health insurers whose stock prices have soared. My testimony today will focus on one profound and expanding failure, massive fraud and abuse in the exchanges.
▶ 1:40:37GAO's work shows how vulnerable the program is to fraud with 96% of fake applications enrolled in subsidized coverage. Paragon's work shows the staggering cost. Our research grew out of a single conversation. In May 2024, I testified in Texas. A state senator asked as asked me about techniques being used to inappropriately enroll people in fully subsidized ACA plans.
▶ 1:41:07I responded that there were large incentives for abuse, but that I did not know the scale. Upon returning, I asked my team to do a simple analysis. compared the number of people enrolled claiming income between 100 and 150% of the poverty level to the number of people who would be eligible for a plan with that income.
▶ 1:41:28Under COVID era subsidy boosts, the ones set to expire after this year, coverage was made fully subsidized for people who claimed income in that category. Using conservative assumptions, we found five million more people enrolled in that income category than were eligible in Nearly half of all enroles claimed income in this narrow band, and more than half of them
▶ 1:41:59were not eligible. In 2024, federal spending on ineligible enroles likely exceeded $20 billion. We published our findings in a paper entitled The Great Obamacare Enrollment Fraud. Others replicated Paragon's work and they got the same result. Exchange enrollment had surged in large part because eligibility rules were ignored. Improper and phantom enrollment took off.
▶ 1:42:25After ignoring the problem for two years, the Biden administration's actions to penalize some brokers were too little too late. has proof of their failure. Improper enrollment surged. In the last open enrollment period on President Biden's watch after open enrollment in 2025, there were 6.4 million people enrolled in fully subsidized plans who were not eligible at a cost of 27 billion.
▶ 1:42:55Many enrolles were victims, signed up without their knowledge. Some lost plans they liked, and others now face tax One customer service agent said that half of people signed up had no idea that they were enrolling in health insurance. A new study from the Competitive Enterprise Institute shows two times more people enrolled in exchange plans than report being enrolled in those plans.
▶ 1:43:22Automatic reenrollment has simply shuffled improper eligibility determinations from one year to the next. In 2025, 45% of all exchange enroles took no action and were automatically reenrolled. Given widespread improper enrollment and m many enrolles unaware of their coverage, we would expect many to never use their plan. The Biden administration didn't release information on zero claim enroles.
▶ 1:43:52Fortunately, in August, the Trump administration did. What did we find? a surge in enroles who never used their plan. No doctor visit, no prescription, no lab work. In 2024, nearly 12 million enroles did not use their plan a single time, up from fewer than 4 million in Overall, 35% of all exchange enrolles never use their plan.
▶ 1:44:19And 40% of fully subsidized enrolles did not have a single claim. Zero claim exchange enroles are more than double what occurs in a normal health insurance market and are double the rates before the co era subsidy expansion. There are unquestionably millions of phantom enroles in the exchanges. Federal taxpayers sent more than $ 35 billion to insurers in 2024 for people who never used their plan.
▶ 1:44:47The one big beautiful bill took some important steps to improve exchange program integrity. But the best way to reduce the fraud and waste is for the COVID era subsidy boost to expire as scheduled. That would still leave in place extremely generous subsidies that would cover the vast majority of premiums and that grow more generous over time on autopilot. Uh thank you and I look forward to answering your questions.
▶ 1:45:13Thank you very much. And now we will move on to Dr. B. Chairman, ranking members and members of the subcommittees. Thank you for the honor of testifying. My views do not represent Johns Hopkins or its affiliates.
▶ 1:45:30In a study soon to be published in JAMA Health Forum, my colleagues and I have found that from 2014 to 2023 10-year period, Obamacare premium subsidies grew from under 20 billion to 83 billion. So this year it's going to be $130 billion. Number two, for subsidized plans, the taxpayer share rose from 29% to 74%.
▶ 1:46:01Three, unsubsidized plans lost appeal. Their market share shrank by about a So taxpayers spent hundreds of billions of dollars on Obamacare subsidies. But did the money go to the right place? Jo, DOJ, Paragon Institute and others have found the answer is no.
▶ 1:46:24What they found is actually only a tip of the Fraud is like cockroach infestation. Once we see one, there are more. Subsidy fraud happened because government agencies have little incentive to care when they spend taxpayers money and insurers and brokers have no incentive to stop it.
▶ 1:46:53As we discuss subsidy, we should always remember the root problem is the unaffordable low value Obamacare itself. It was originally sold to American people as affordable. President Obama promised premiums would go down by 2500. At that time, many economists already predicted unprofit unaffordability as we are experiencing today.
▶ 1:47:24Through numerous regulations, Obamacare damaged both the provider market and the insurance market. consolidation, stagnation, high prices and high premiums followed. Some people blame private companies, but the private companies are merely responding to the bad incentives created by Obamacare. Others blame FTC for consolidation.
▶ 1:47:51But by the time mergers acquisition transactions reach FTC, it's already too late. Obamacare has made the soil so toxic that only large entities can That is why Obamacare is both a taxpayer fraud and consumer deception.
▶ 1:48:15The COVID era enhanced subsidy used the taxpayers to lure higher income consumers employees into unaffordable plans that they would not have bought otherwise without addressing any underlying unaffordability and also set them up as political pawns for another future premium cleave.
▶ 1:48:43So this is also consumer deception and taxpayer fraud. Obamacare defrauds taxpayers three times. First, paying for expensive premium subsidies. Second, paying those pro fraudsters. Third, paying high price and premiums for their own health care caused by Obamacare.
▶ 1:49:08Except for a small number of people who benefited politically and financially from Obamacare, all Americans lose. Patients are deprived of affordability and access that the free market could have brought. Physicians, entrepreneurs, innovators, and American workers can't reach their productivity potential. Our employment, economy, and global leadership suffered.
▶ 1:49:40Obamacare fraud was created by Congress and can only be fixed by Congress. First, open the book and let the public help detect and deter subsidy fraud. Second, most importantly, invigorate healthcare markets. Let the patient control their healthcare dollars. Let providers compete on level the playing field.
▶ 1:50:05Let ensures design offer plans that consumers actually want and deregulate and unburden all players. Hundreds and millions of Americans want a better house and a lower price. Countless builders want to compete, innovate, and earn returns. But their hands are tied by Obamacare.
▶ 1:50:30Members of Congress, please unleash American dynamism into healthcare and bring true access and affordability to all. Thank you,
▶ 1:50:42Dr. B. Thank you. Uh, next we will ask Professor Cooper. Thank you for being
▶ 1:50:48Thank you. Good afternoon, Chairman Chairman Van Drew, Chairman Fitzgerald, Ranking Member Rascin, and members of the committee. My name is Zach Cooper. I'm a health economist and professor at Yale University where my research focuses on understanding the drivers of healthcare spending growth in the United States and how healthcare spending impacts the wider economy. Today I'm testifying testifying here on my own behalf, not on behalf of Yale University and the views I'm going to express are my own. I greatly appreciate the opportunity to be here.
▶ 1:51:19A decade ago in my health economics class when I taught my students about the relationship between health insurance, health and mortality, what I told them was health insurance is fundamentally a financial tool. I was wrong. A decade later, my views have changed because the research has changed. The clearest evidence we have now is that enrolling an American in an affordable care act plan on the exchanges makes them less likely to die.
▶ 1:51:46The enhanced ACA subsidies that help approximately 22 million people in this country purchase plans are set to expire at the end of the year. The people getting health insurance on the exchanges are farmers, their ranchers, their cooks in small restaurants or contractors who run their own businesses. If those subsidies end, the premiums people pay are going to skyrocket and approximately 4 million people are going to lose their coverage. um extending those subsidies matters.
▶ 1:52:13But if we focus only on whether the subsidies remain in place, we're having the wrong conversation. The real problem we're facing in this country is the underlying cost of healthcare. The growth in healthcare spending is what makes the subsidies necessary in the first place. It's driving up premiums for employer sponsored health insurance coverage, driving up premiums on the exchanges. Rising healthcare spending is crushing families. It's slowing wage growth. It's reducing employment for Americans earning less than $100,000 a year who are working outside the healthcare sector.
▶ 1:52:42As I've said, healthcare spending is literally crushing the American dream. Next year, premiums for employer sponsored plans are expected to increase 10%. Premiums on the exchanges are projected to rise 18%. The premium growth is largely being driven by the growth we're seeing in hospital and provider prices. I want you to think mergers, staffing shortages, and tariffs on medical devices. And then there's the increasing use of GLP1s.
▶ 1:53:07As the Congressional Budget Office has said, the exchange plans are seeing a sharper increase in premiums than the employer plans precisely because of the uncertainty over the expiration of the ACA subsidies. Shurers had to factor in the risk that if the subsidies expired, healthier people would be less likely to buy insurance on the exchanges, which is going to lead to a sicker insurance risk So price growth is the biggest problem we're facing.
▶ 1:53:34Over the last two decades, prices in the hospital sector, as an example, have grown faster than prices in virtually any other sector of the US economy. We've seen huge numbers of hospital mergers, mergers of hospitals and physician practices, mergers of pharmacy benefits managers. This is what the problem is that we're facing. And there are practical steps Congress could take to address this. The first is introducing so-called sight neutral billing. Medicare often pays more.
▶ 1:53:59sometimes double for the identical services when they're delivered in a hospital versus in an independent physician's office. This encourages cent consolidation. It raises prices. It drives up premiums. A second is increasing funding for antitrust enforcement. Increasing enforcement budgets turns out to be cost-effective for the federal government. It makes a difference. Finally, I think we need to begin serious exploration of larger healthcare reforms um that could be implemented over the next decade.
▶ 1:54:27During the shutdown, one idea that briefly surfaced was a bipartisan commission to study ways to lower healthcare spending in this country. That commission shouldn't be a footnote. It's essential. Healthcare costs are crushing your constituents. Now, a brief word on fraud. As the GAO report makes clear, there is a fraud risk on the exchanges. And in 2024, CMS took action to suspend 850 agents and brokers from the fredilun marketplaces because they had a reasonable suspicion of fraud. Um, we shouldn't tolerate fraud.
▶ 1:54:57We should work tirelessly to stop it. However, my review or my read of the literature is that fraud is not the primary driver of the growth we're seeing right now in healthcare spending. What's really driving premium growth is growth in healthcare providers prices. We as a country have failed to take the necessary steps to make healthcare affordable for people in this nation. My insurance is good. I'm going to assume that most of the folks in this room have pretty good insurance coverage.
▶ 1:55:28The reason I think that subsidies are important is because lower and middle class and lower and middle inome Americans shouldn't be left uninsured or stuck paying astronomical premiums because policy makers, healthcare purchases like employers have failed to make the tough choices that need to be made to re in health care costs in this country. Subsidies alone aren't a solution. What they do is buy us time. The point is to use the time that they provide to build a system where coverage is affordable because care is affordable.
▶ 1:55:58So, I'm delighted to talk about the steps we could take as a country to make healthc care more affordable. Thanks for the opportunity to testify and I look forward to your I thank the gentleman. I am now going to recognize the ranking member for his statement. Ladies and gentlemen, I want to apologize a little bit. We cannot control what happens on the floor. things took much longer today. We're going to have another voting session.
▶ 1:56:23We are going to attempt to have two people to be as fair as we can on either side of the aisle speak and that's going to wrap the hearing up. Otherwise, we'd have to come back and everybody has previous commitments. So, please accept my apology apology in advance to members on both sides of the aisle and to the witnesses. I am truly sorry about this. I I was looking forward to a robust, thorough, fullthroated debate on this. I really was. uh it didn't happen. Uh the gentleman from Maryland,
▶ 1:56:52Mr. Mr. Chairman, [clears throat] thank you very much. And Professor Cooper, let me just pick up with what you just said. Uh you testified that it was actually growth in healthcare prices and insurance prices that is really driving the cost increases, not so much fraud. But then you mentioned that there were uh 850 insurance agents and brokers who were suspected of fraud, waste, and abuse who had been removed by the Biden administration.
▶ 1:57:19Um and then this is somewhat of a bombshell, I think, tucked in the GA report, all 850 of those shady insurance agents and brokers accused of fraud were allowed back into the marketplace that they were suspected of defrauding. Did I hear that right? That's my understanding. Yes.
▶ 1:57:38Um, well, I know you don't think fraud is the big deal here, but but that can't be a sound practice. Can it be to have the Trump administration restoring potentially fraudulent brokers and agents to the government to the program?
▶ 1:57:54If your goal um, Congressman Raskin is to reduce fraud, that's not what I would
▶ 1:57:59Okay. So, Mr. BDOY, let me come to you. you you identified in your report potential risks for fraud in the ACA program. Just to be clear, are those kinds of potential risks you identified unique to the ACA program or are those um potentially present in all healthcare programs or all government programs?
▶ 1:58:21Yeah, it's a great question. Thank you for asking it. uh you know the the indicators for identity proofing and eligibility determination. Those are the key ones that pretty much run the gamut of any kind of
▶ 1:58:33good. And so just to follow up on that, um this also is not something new that's taking place now or was not new in the last administration. You identified that that potential risk of fraud went back to 2014, right?
▶ 1:58:46That's when we first started this work, sir. Yes.
▶ 1:58:49Okay. So it seems to me that really this hearing should be about what is the administration doing to confront this risk of abuse that has been you know in place for more than a decade. So can anybody answer what Secretary Robert F. Kennedy Jr HHS and memed Oz are actually doing about the potential kinds of fraud that go back to 2014? I don't know. Dr. replace. Can you answer that?
▶ 1:59:19Yes. Uh thank you for that question. Uh Congressman, they uh administration did a final rule um on uh exchange program integrity that included a lot of policies that would reduce the fraud. Um one of them was to uh have a $5 minimum payment um to review people's eligibility prior to continuing enrollment to address issues with auto reenrollment. uh that rule was stayed by one judge so wasn't in effect.
▶ 1:59:48The reconciliation bill actually has three uh important provisions to address some of the fraud. Um it will uh require enroles starting in 2028 to take action prior to being auto reenrolled. So they won't the insurer won't be able to just keep them in the plan. The enroll will have to do something. Yeah.
▶ 2:00:07Um, it addresses the Biden administration opened up a enrollment for anyone claiming income in a certain category at any point in the year and I mean the GAO report showed just how vulnerable the exchanges were. So that uh it's called the special enrollment period significantly opened up the opportunity for fraud.
▶ 2:00:27Let me just stop you because I'm running out of time here. Um the the f the United States District Court in Maryland struck down that rule, state enforcement of that rule as I understand it right and that was based on the report that you prepared. Is it is that the Paragon report? Am I getting that right?
▶ 2:00:42No. So the um there were commentators that cited the Paragon report and so the judge in his decision said that CMS didn't do an adequate explanation of describing the the policy. There was also another judge in a Massachusetts court that looked at the same issue and threw out the
▶ 2:01:05but so let me here here's what the court said if I'm and I'm this is not really my field but um it said defendants are not free to support a rule change with data of questionable validity and limited relevance and then refused to engage with commenters reasonable concerns that the data fails to support the conclusion the agency drew from the data. And so the court essentially rejected the underlying methodology and the data that was collected.
▶ 2:01:31Well, the the the court didn't look at the Paragon report. The court looked at the commentators that wrote about the Paragon report. And I can tell you, Congressman, CBO has cited that report in their work. CBO has estimated um improper enrollment in the exchange and CBO's estimates are consistent with what Paragon produced.
▶ 2:01:52Okay. Well, thank you for that. And I, you know, I just hope that the administration will take the problem of fraud and abuse seriously and work on it because the tools exist now. Thank you for your patience, Mr. Chairman. I yield back to you.
▶ 2:02:02I thank the ranking member. I'm just going to ask a couple of questions quickly because I want a couple other members to be able to speak real quickly to all of you. Is the GAO a nonpartisan Mr. Bagdoyan?
▶ 2:02:16Dr. Blae, yes. Nonpartisan. It's not a Republican organization.
▶ 2:02:20Dr. B. Dr. B.
▶ 2:02:25Yes. Okay. Thank you. Um, Professor
▶ 2:02:28Okay. Thank you. Did the GAO, Dr. Blaze, I'll ask you this question, say that dead people were receiving benefits?
▶ 2:02:36They did.
▶ 2:02:36Okay. Did the GAO say that fraudsters, brokers, and agents were misusing the system, getting benefits themselves, and moving people into plans they don't
▶ 2:02:49Yeah. The GAO report showed significant vulnerabilities with the exchange.
▶ 2:02:53Did the GAO show nonpartisan that money was going to social security numbers, not families, to multiple numbers uh of social security numbers from multiple individuals and they were receiving subsidies and it couldn't be possible.
▶ 2:03:09Yeah. I mean tens of thousands.
▶ 2:03:11Tens of thousands. Yeah.
▶ 2:03:12Okay. So that that's my first point and the point I wanted to make as well. I think that we have uh you see can you
▶ 2:03:19Yes, Mr. Chairman. I'd like to submit for unanimous consent that uh for the record this article is titled the great Obamacare enrollment fraud. Uh this is a Paragon Health Institute paper led by our witness Brian Blae. And the paper takes a deep dive into the Affordable Care Act and explains how it is susceptible to fraud, opening the door to insurance brokers to take advantage of the marketplace.
▶ 2:03:39I thank the gentleman without objection and I just want to say briefly and then we're going to move on to some other questions. Um, that's what this hearing is about. And I wish we had more time. It I know people have different visions of what health care should be in the United States of America, but we have a system now that's wrought with fraud, that doesn't work, that isn't right, that's taking money from good American people, and giving it to people who are fraudulent in so many different ways, individuals, insurance companies, brokers, agents, and man, people
▶ 2:04:10are tired of it,
▶ 2:04:11and we owe them better. So, we ought I'm on my time, please.
▶ 2:04:15Oh, are we are you okay?
▶ 2:04:17I am.
▶ 2:04:17It wasn't working.
▶ 2:04:18Um, so for that reason, I think regardless of what you feel, man, I hope and I'm not even going to ask you because I'm not out to embarrass anybody. I hope that every member on the other side read the entire GAO report. I didn't know that was all that was in there. It was startling. It was scary. It was of concern. And Republicans didn't write the damn thing. It came from a nonpartisan government organization that just does what's right.
▶ 2:04:45Sometimes I don't like what they do, but they do what they think is right and tell the truth. With that, I will yield to Mr. Korea. Ladies, chairman, Mr. McDillian, you talk about fraud, the GAO report. In that GAO report, is there anything there that suggests that the premium tax credit should be eliminated?
▶ 2:05:11No, that is not part of our work. We're not looking at policy or viability, sir.
▶ 2:05:16Okay. And and I'm going to come back to Professor Cooper. You talked about subsidies being important to cover with health care, lower class, middle class. We're talking about workingclass families in this who when these premiums, tax credits expire, they will essentially be uninsured. That's really the issue here.
▶ 2:05:44Insurance for workingclass families, not about fraud because there's a lot of fraud in a lot of areas in this government, but to go after health care for workingclass families, that's what we're talking about today. They're going to expire without a doubt.
▶ 2:06:04I want to see each and every one of us up here what kind of phone calls we're going to get from our constituents when they end up not being able to pay for their health care in the richest country in the world with the most advanced medical technology in the world. So, Mr. Cooper, let me ask you a question. Senators are talking about health care savings plans as opposed to tax credits.
▶ 2:06:32How is this going to enable Americans to afford health care? Thank you for the question, Congressman. I don't think they do. I don't think they fundamentally address three core issues. The first is it still exposes consumers to significant out-of- pocket costs. If you look at the plans people are going to enroll in, they're going to have out-of- pocket maximums for individuals at 10,000 for families around 20,000. We're not
▶ 2:06:56small business owners, entrepreneurs, their employees. How will this tax credit cancellation help them afford health care?
▶ 2:07:10Yeah, the the health savings accounts won't make getting insurance easier. Um, we're going to see premiums for a couple making 85,000 who are 60 years old jump by $20,000. It's not going to help those
▶ 2:07:21So, let's talk about this red herring fraud. There is fraud. Are individuals insured getting rich off this fraud, getting a subsidy in their healthcare? Are they using it to finance their vacations or are we talking about an industry with brokers that are essentially making money? 850 that were suspended.
▶ 2:07:45How many of those individuals actually spent time in jail or actually were able to cough up those illegally gotten gains? Anybody here tell me how many of those folks spent a day in jail, gave back ill- earned savings earnings that they got fraudulently? We're talking about fraud here today and nobody nobody went to jail.
▶ 2:08:10So, how serious really are we about fraud versus insuring individuals, dead people, social security numbers? Did those people benefit from the subsidies? Did their relatives benefit from the subsidies or did the brokers make a buck off the government? Which one is it? Anybody? the insurance company and the brokers, they have every incentive to
▶ 2:08:38So why didn't they go to jail?
▶ 2:08:40There there have actually been some people that have gone to jail.
▶ 2:08:42So the punishment here is to punish every American that's subsidized today under the Affordable Care Act. They're the ones that are going to be punished because they're going to lose the ability to afford health care. That's what we're saying here today.
▶ 2:08:59I'm going tell my colleagues here, let's see what happens January 1st next year when you start getting the phone calls from your constituents that are uninsured, lose insurance, or those hospitals that are relying on those premiums to stay open, not in the big cities, but out in the countryside. That's what this debate is really about. Fraud. Let's get the DAs, attorney generals to go after these criminals.
▶ 2:09:27But to go after middle class, hardworking families and take away the possibility of having healthcare and saying it's a broken system. If it's a broken system, I challenge my colleagues. Show me something better. We're waiting for your solutions.
▶ 2:09:4215 years.
▶ 2:09:43Thank you, Mr. Chairman, and I yield.
▶ 2:09:45Thank you, Mr. Korea. I'd like to submit with unanimous consent an article into the record. The press release is titled President of Insurance Brokerage firm firm and CEO of marketing company convicted in $233 million affordable care act enrollment fraud. The American people are the victim and this is a press release from the Department of Justice. I'd like to submit that. With that being said,
▶ 2:10:09Mr. Chairman, I also like to submit some articles for the record. First one by Kaiser Healthcare News. Health saving accounts backed by GOP covers fancy saunas not insurance premiums. Number two, Washington Post. Why healthc care savings accounts aren't the fix Republicans hope for. Number three, by Fortune magazine, Trump wants more health care savings yet they can't pay for the insurance premiums. Number four, Kaiser Foundation. Fraud in the marketplace enrollment and eligibility.
▶ 2:10:39Five things to know. Number five, keep Americans keep Americans covered fact sheet on healthcare. And then finally, small business majority. The expiration of the ACA enhanced tax credits will devastate the small business community.
▶ 2:10:54Without objection, I now recognize Mr. Isa from the great state of California.
▶ 2:10:59Thank you. Dr. Blae, uh, is it true that if government subsidizes part of health care that it lowers the cost to the individual who pays for healthare?
▶ 2:11:09Yes. Is it equally true that it has no side effect on the actual cost of
▶ 2:11:16Yeah, raise it well raises the taxpayer
▶ 2:11:18So the the fact is if we want to lower the cost of health care, we have to attack the cost of health care, not the subsidy that ultimately lowers it for some while or raising it for others through t being taxed. There was a lot of discussion uh today about there isn't fraud.
▶ 2:11:37In your experience, if we if we prosecute as many frauds as we can, if we claw back as much dollars as we can, do we make the return on investment and the likelihood of additional fraud fraudsters go down? In other words, is prosecution and clawback a deterrent?
▶ 2:11:59It is. Um, Mr. Ice, I would say here the real problem are the underlying incentives. The underlying incentives.
▶ 2:12:05I'll get to that. Okay. And then the the next one is, is an affirmative request to have a a benefit an unreasonable thing to ask for from everyone who receives the benefit? In
▶ 2:12:19I do not think that's an unreasonable request. So requiring that if someone wants a renewal, they apply for it not only reduces fraud, but it clearly is intended to be a reasonable request that somebody say they want it and they're entitled to it.
▶ 2:12:36Yeah. Especially if the product is nearly fully or entirely fully subsidized by the government.
▶ 2:12:42I agree. I'd like to uh yield the remainder of my time to Mr. Aldridge.
▶ 2:12:47Uh thank you, Representative. I wanted to read a portion of a letter in my office. I'll abbreviate it in interest of time. This is from a Missouri de dairy farmer. He says, "We seem to have gotten health insurance confused with actual health care. I can say from personal experience that having coverage through the marketplace does absolutely nothing for me in regards to actually getting health care. The plan we have had for the last years has a deductible and copay that is so high. I typically go to see doctors as a self-pay patient.
▶ 2:13:17this gets me a discount on care and I will be charged less than half of what it would be to pay the deductible if insurance was build. He said secondly, the consolidation of health providers has led to skyrocketing costs. This leads to total lack of price transparency and he goes on basically this dare dairy farmer laid out the Republican plan for health care which is to promote competition and transparency and thereby deliver lower prices and better quality. Um Dr.
▶ 2:13:46Blaze, I know you covered this in your testimony, but I think this is important to um reiterate. For the record, the expiring COVID era subsidies are responsible for what percentage of the 2026 premium.
▶ 2:14:00Uh the expiring subsidies are responsible for a very small percentage, Congressman, about 3%.
▶ 2:14:05About 3%. And so the remaining what 13.3% premium increase will still go into effect regardless of whether the co era subsidies
▶ 2:14:16yeah premiums are going up next year because of underlying problems with Obamacare not because the enhanced uh co era subsidies are expiring.
▶ 2:14:24So what is the actual cause of that
▶ 2:14:29I mean there is a lot of structural problems with Obamacare. um the regulatory structure had increases costs over time um and the underlying subsidy structure within Obamacare has increased costs. So I think professor Cooper is right there are underlying health care costs but Obamacare is inherently inflationary both the regulations in Obamacare and the subsidy structure in Obamacare.
▶ 2:14:55If you want to lower health care prices and costs um within Obamacare, you need to tackle the basic architectural um flaws.
▶ 2:15:04Thank you, Dr. Blae. And I just Yes. And here we have the uh this chart. If you could put that back up, uh we see that uh rates in Obamacare went up twice uh that of uh that of the uh the average employer-based plan and three times the rate of inflation. And I yield to the chair of the full committee. Uh, Representative Jordan,
▶ 2:15:25I think the gentleman for yield. I was just going to point out this is this is something doesn't happen too often where the Democrat witness actually agrees with the Republican plan because I think Professor Cooper said, quote, "Subsidies aren't a solution or aren't the solution. They should be temporary." That's where we're at. We want to address the underlying problem. Then he talked about reforms. He talked about sight neutral bill. I mean, we want all those things, too. That's the point. the Democrats that someone I think the ranking member said earlier, you know, the Republicans don't have a fix.
▶ 2:15:52The Democrat fix is to continue the same old thing, which is just what that chart displayed doesn't work and continue the subsidies forever, not temporary as their witness said they should be. So, we want the temporary subsidies to deal with the cliff. But we need the reforms that encourage choice and competition and would actually bring down premium costs. So, I wish we had more time. I appreciate the the the witnesses and the testimony they gave and I appreciate the study from the GAO which showed just all the fraud that's taking place as well. Yield back to the chairman. Thank you for having this.
▶ 2:16:20Thank you, chairman. And let me just say I agree with the chairman and something I've been saying all along. Temporarily got to do something long-term. We got to do so much better. That's what this was about, this hearing. With that being said, it concludes today's hearing. We thank our witnesses for appearing before the subcommittee today. Um,
▶ 2:16:38feel free. I'm gonna Okay, before I gave out. Yes, go ahead.
▶ 2:16:42Great. Great. Um, this is from the American Hospital Association. Um, this is setting the record straight, separating fact from fiction on health insurance marketplace fraud. Professor Cooper's article in New York Times, the healthc care debate we really need. Uh, and finally, the Georgetown Center on Health Insurance Reform, health savings accounts, Robin Hood in reverse.
▶ 2:17:04Thank the ranking member without objection. And that concludes today's hearing. Without objection, all members will have five legislative days to submit additional written questions for the witnesses or additional materials for the record. Um, and again want to apologize to you all. I wanted to keep you here until you were exhausted and we had a couple hours where we were stuck on the floor. You did a good job. Thank you. And again, I apologize to the other side of the aisle. Again, I wish we could have debated even longer.
▶ 2:17:31With that, without objection, and I apologize to our guys, without objection, this hearing is adjourned.