Crapo: Obamacare Has Undermined Health Care in America
Washington, D.C.—Today on the Senate Floor, U.S. Senate Finance Committee Chairman Mike Crapo (R-Idaho) called on his colleagues to support the Health Care Freedom for Patients Act, legislation to lower health care costs and give money directly to families to control their own care. He also discussed Obamacare’s failures, including the rampant fraud caused by the enhanced Obamacare health care subsidies, and explained why a straight extension of this program will do nothing to lower costs or premiums, or protect taxpayers.
On the failure of Obamacare:
“There were signs from the start that Obamacare would not work, which is why not one single Republican voted for it. That is also why the Democrats created the premium tax credits in the first place: they did not trust the one-size-fits-all nature of Obamacare to lower costs or to expand options. Instead of decreasing, over the last 15 years, Obamacare premiums have increased over 220 percent. A family of four pays $10,000 more for coverage today than they did before Obamacare, and their deductibles have doubled. Insurance providers have dried up and rural hospitals are struggling.
“Obamacare is broken and throwing good taxpayer money after bad policy is not going to fix it.
“The enhanced premium tax credits account for only about four percentage points of next year’s projected 20 percent increase in insurance premiums. Extending them will not solve this crisis. What it will do is cause tens of billions in more dollars to be paid directly to insurance companies without improving patient care or choice.”
On fraud in the Biden COVID Bonuses:
“With taxpayers footing the bill, these subsidies give insurance companies every single reason they need to keep hiking premiums. Even the Washington Post just yesterday explained that ‘Obamacare subsidies make it too easy to scam the system.’
“Last year, the Centers for Medicare and Medicaid Services found that 1.6 million Americans were enrolled in both Medicaid and Obamacare plans. This year, 6.4 million Americans were improperly enrolled in enhanced premium tax credits at a cost of $27 billion.
“Another 12 million subsidized plans reported no claims in 2024, suggesting that many of them were opened on behalf of people who did not even know they were insured. Because insurance companies receive the subsidies regardless of whether a plan is used, there is no incentive on their part to check the enrollment status. In 2024, 35 billion dollars were paid out for these unused plans.”
On the Health Care Freedom for Patients Act:
“Senator Cassidy and I have a different plan. The motivating principle is simple: patients should decide where their health care spending goes, not insurance companies.
“In line with President Trump’s call to direct money to patients instead of insurance companies, this approach builds on the success of the Working Families Tax Cuts Act, which expanded Health Savings Account (HSA) eligibility to be paired with more affordable insurance plans.
“These pre-funded, patient-driven accounts will help Americans pay for the out-of-pocket costs that are making health care unaffordable.
“Our plan would take some of the money that otherwise would be spent on the COVID bonuses and direct it into HSAs attached to Obamacare bronze or catastrophic plans as monthly deposits totaling 1,000 to 1,500 dollars a year. Families can use that money to cover costs not handled by their insurance policy, without waiting for insurance companies to approve their treatment decisions.
“Families can use that money to cover costs not handled by their insurance policy, without waiting for insurance companies to approve their treatment decisions. Our plan would also fund cost-sharing reduction subsidies, which mitigate out-of-pocket costs for low-income enrollees, reducing premiums by over 10 percent and saving taxpayers’ money.
“It is time to lay the groundwork for giving Americans more control over their health care choices and truly making quality health care more affordable.”
______________________
Full remarks as prepared for delivery:
This week, we are going to spend a lot of time discussing the problems with our health care system. To do that, we need to understand how we got here.
Concerns about rising health care costs are not new. In 2009, Democrats highlighted shortcomings in the American health care system as proof that the federal government had to intervene.
President Obama told us how to judge his health care plan. He told us that Americans would be able to keep their insurance plans and their doctors.
He also told us that insurance premiums would go down. As everyone knows, these predictions did not come true.
But there were signs from the start that Obamacare would not work, which is why not a single Republican voted for it.
That is also why Democrats created the premium tax credits in the first place: they did not trust the one-size-fits-all nature of Obamacare to lower costs and expand options.
Instead of decreasing, over the last 15 years, Obamacare premiums have increased over 220 percent.
A family of four pays $10,000 more for coverage today than they did before Obamacare, and their deductibles have doubled.
Insurance providers have dried up and rural hospitals are struggling.
Obamacare has undermined health care in America.
In 2021, Democrats again decided that premiums were too high and that a federal response was necessary.
But rather than fix the structural flaws in Obamacare, they created an even bigger subsidy with fewer guardrails to entice more people into a broken program.
Not only did they make the subsidy bigger, they made everyone eligible regardless of their income, so families making $600,000 a year began to qualify.
Democrats also temporarily eliminated reviews to confirm accurate payments and allowed individuals to continuously enroll throughout the year.
Because those changes were made under the premise of responding to the pandemic, the enhancements were only supposed to last for two years.
But before they expired, Democrats extended them for three years, again without a single Republican vote.
With those expanded subsidies again about to expire—again, at a date set by my Democrat colleagues—the pattern has become clear:
Democrats respond to rising premiums by throwing taxpayer money at the problem.
Their supposedly “short-term” fixes only drive premiums higher and make the problem harder to solve, leaving us with apparently no choice other than to do the same thing again and again.
Obamacare is broken and throwing good taxpayer money after bad policy is not going to fix it.
The enhanced premium tax credits account for only about four percentage points of next year’s projected 20 percent increase in insurance premiums.
Extending them will not solve this crisis.
What it will do is cause tens of billions in more dollars to be paid directly to insurance companies without improving patient care or choice.
With taxpayers footing the bill, these subsidies give insurance companies every reason to keep hiking premiums.
Even the Washington Post just yesterday explained that “Obamacare subsidies make it too easy to scam the system.”
Last year, the Centers for Medicare and Medicaid Services found that 1.6 million Americans were enrolled in both Medicaid and Obamacare plans.
This year, 6.4 million Americans were improperly enrolled in enhanced premium tax credits at a cost of $27 billion.
Another 12 million subsidized plans reported no claims in 2024, suggesting that many of them were opened on behalf of people who did not even know that they were insured.
Because insurance companies receive the subsidy regardless of whether a plan is used, there’s no incentive to check the enrollment status.
In 2024, 35 billion dollars were paid out for these unused plans.
My colleagues in the House asked the Government Accountability Office to look into the fraud surrounding the Obamacare tax credits.
Their findings were shocking.
The GAO created fake identities and attempted to enroll them in subsidized Obamacare plans.
All four of their fake applicants in 2024 received subsidies.
This year, 18 of 20 applicants did.
The GAO also found tens of thousands of cases of apparent identity theft, and hundreds of thousands of cases where insurers or brokers changed people’s plans or enrolled them in new ones without their consent.
Perhaps worst of all, they found that over $21 billion worth of subsidies—nearly a third of all subsidies paid out in 2023—had not been double-checked against enrollees’ income.
That means that there was nothing stopping those enrollees from misrepresenting their incomes to receive higher subsidies than those for which they were eligible.
Ultimately, it is not just taxpayers that are hurt by this fraud, although taxpayers should not be on the hook for it to begin with.
The other Americans who rely on federal health programs suffer as these programs go to waste.
Republicans addressed some of these program integrity issues in the Working Families Tax Cuts Act when we tightened eligibility and verification standards for federal health care programs.
But no degree of oversight and enforcement is as effective as addressing the basic incentives that result in fraud.
I appreciate that some of my Democratic colleagues have finally acknowledged these issues, but the fact remains that they have not offered any ideas on how to solve them.
Extending these expensive, fraud-ridden subsidies for another three years with no real reforms—not one!—is a non-starter.
Continuing to pour billions of dollars more into the pockets of big insurance companies and fraudsters will not lower health care costs for American families—especially when you consider that the vast majority of Americans are not insured through the Obamacare marketplace and are therefore not eligible for these subsidies in the first place.
Senator Cassidy and I have a different plan. The motivating principle is simple: patients should decide where their health care spending goes, not insurance companies.
In line with President Trump’s call to direct money to patients instead of insurance companies, this approach builds on the success of the Working Families Tax Cuts Act, which expanded Health Savings Account (HSA) eligibility to be paired with more affordable insurance plans.
These pre-funded, patient-driven accounts will help Americans pay for the out-of-pocket costs that are making health care unaffordable.
Our plan would take some of the money that otherwise would be spent on the COVID bonuses and direct it into HSAs attached to Obamacare bronze or catastrophic plans as monthly deposits totaling 1,000 to 1,500 dollars a year.
Families can use that money to cover costs not handled by their insurance policy, without waiting for insurance companies to approve their treatment decisions.
Because families want the best value for their money, they will seek out the most appropriate treatment. Over time, this should result in lower health care costs as care providers compete for patients.
Our plan would also fund cost-sharing reduction subsidies, which mitigate out-of-pocket costs for low-income enrollees, reducing premiums by over 10 percent and saving taxpayers’ money.
These cost-sharing reductions would finally challenge the notion that Americans should simply accept ever-escalating premiums as the norm.
In contrast, Democrats’ temporary COVID bonuses do not lower costs or premiums.
They throw billions of dollars at insurance companies, up to 20 percent of which can go to profit and overhead.
Our plan avoids that issue and empowers patients to control their own health care.
We cannot transform our broken health care system overnight, but we can make real progress.
We still have a chance to enact reforms that will do more than paper over the cracks in our health care system. We should take that opportunity instead of making the enhanced premium tax credit mistake all over again.
It is time to lay the groundwork for giving Americans more control over their health care choices and truly making quality health care more affordable.
Previous Article