Senate Proposes Health Care Freedom Act Amid Concerns Over Obamacare Subsidy Fraud

The U.S. Senate Finance Committee Chairman Mike Crapo addressed key issues regarding the sustainability and integrity of the Obamacare premium tax credit subsidies during a Senate Floor discussion. He attributed the impending health insurance affordability concerns primarily to the design and extension of these subsidies by Democratic lawmakers. Originally introduced to make health insurance more affordable, premium tax credits have been repeatedly enhanced and extended without bipartisan support, leading to a budget impact now estimated at $83 billion if extended further. Fraud and misuse in the subsidy program were highlighted, including cases where individuals were enrolled in Obamacare plans without consent and instances of improper income verification. The Government Accountability Office (GAO) found tens of billions of dollars in subsidies had not been reconciled with enrollees’ incomes, suggesting income misrepresentation and dual enrollment abuses were widespread, costing taxpayers an estimated $27 billion in 2023 alone. To combat these issues, Crapo and Senator Cassidy introduced the Health Care Freedom for Patients Act, which proposes empowering individuals through permanent premium tax credits linked to qualified bronze plans paired with Health Savings Accounts (HSAs). This approach aims to give Americans control over their health care spending, with annual HSA contributions between $1,000 and $1,500 to cover out-of-pocket costs and encourage competitive pricing and improved care outcomes. The plan also emphasizes enhancing citizenship verification and discouraging state-funded coverage for undocumented individuals to better target federal funds. Additionally, the bill includes funding for cost-sharing reduction payments targeted at low-income patients to lower their out-of-pocket expenses and reduce marketplace premiums by 11%. Crapo stressed the need for reform rather than perpetuating unsustainable subsidy extensions and welcomed bipartisan collaboration on health care policy reforms, including recently proposed pharmacy benefit manager reforms. This legislative push reflects ongoing debate over the intersection of federal health care subsidies, regulatory compliance, and efforts to curb health care costs while ensuring program integrity and market sustainability.