A mess she never made

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MYRNA BROWN, HOST: Up next, healthcare fraud hits home.

More than a million Americans report identity theft each year. Victims often discover it when their credit scores sink or bank accounts are drained. But sometimes the theft isn’t so obvious.

WORLD’s Harrison Watters has the story.

MANNING: Come on goats! [bleeting]

HARRISON WATTERS: Susan Manning runs a family farm in North Florida. Her husband works in IT, and she’s covered by his health insurance. But in September, she found a strange health insurance tax form on her IRS account.

MANNING: It was in my name, it had my social security number, and a South Carolina address.

She’s never lived in South Carolina. So she called the helpline for the Health Insurance Marketplace…the online exchange for Obamacare.

MANNING: It seemed like they didn't believe me that I hadn't signed up for it. And it took several minutes for me to convince the person that this really was a fraudulent application.

She thought maybe someone used her identity to get health insurance. The Marketplace agent told her it wasn’t that simple.

MANNING: What's more likely has happened is that an insurance agent has signed you up for it to receive a commission.

Manning isn’t alone.

In September, Vice President J.D. Vance said it’s been happening nationwide for several years.

VANCE: In one case we found a fraud ring that had 40 agents, 40 brokerage agents who had funneled 50,000 people into the Obamacare system fraudulently.

That includes people who were ineligible for government health insurance. Some used stolen identities. Others made up names. The problem goes back to a COVID-era change by Congress to increase government spending to pay for millions of people enrolling in Affordable Care Act plans. Here’s Brian Blase, a health policy expert who worked in the first Trump administration.

BLASE: That subsidy expansion made the coverage free for individuals that claimed to have a low income.

That means Americans could get government health insurance without paying any fees. Meanwhile, brokers would get paid to sign them up.

BLASE: The taxpayer sent the money every month to the health insurer. The health insurer then paid the broker every month that the individual was enrolled in insurance coverage.

Ten million new accounts were created by 2024. Blase’s group the Paragon Health Institute estimates at least 5 million of those were ineligible…and possibly fraudulent. Last December, Congress allowed some of the expanded subsidies to expire.

BLASE: That cleaned up some of the problem, but there's a lot of residual problems.

Then last month, the Department of Health and Human Services ended 760,000 accounts for people that either did not exist or had never used their plans. The number of accounts made with stolen information is unknown but likely in the tens of thousands. HHS has since reported less than 1 in ten thousand of the closed accounts were actually in use. Federal Trade Commission chairman Andrew Ferguson:

FERGUSON: When we do these big cutoffs, almost no one comes.

Those real people can appeal the closure.

SOUND: [Goats bleating]

Back in Florida, Susan Manning is working to secure her accounts and social security number. She says it could take up to 45 days for Marketplace to resolve her complaint. And she won’t get her tax refund until it does. With winter coming, that makes things harder on the farm budget.

MANNING: We have to rely on buying hay and grain to feed our animals, and so it’s a time of year when that money is really needed, and it may or may not come in.

Paragon Health told WORLD the helpline at HealthCare.Gov can help uncover ineligible Obamacare accounts. A Marketplace agent told Manning the person that enrolled her in Obamacare was an insurance broker living in Texas.

MANNING: I'm the victim here, but I'm left to clean up this mess that I never created.

At least two states have revoked the Texas broker’s insurance license following other complaints, but no charges have been filed.

Reporting for WORLD, I’m Harrison Watters.

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