CBO Estimates Billions Lost to Obamacare Exchange Fraud

What's happening

CBO Estimates Billions Lost to Obamacare Exchange Fraud — A bipartisan coalition of nearly three dozen House members has introduced a proposal aimed at extending taxpayer-funded subsidies for the Affordable Care Act (ACA), commonly referred to as Obamacare. This legislative move comes as the subsidies are set to expire at the end of December, raising significant concerns about health coverage for millions of Americans who depend on these financial aids to afford their health insurance. Explainer GOP Should Fix Health Care Rather Than Bailing Out Obamacare Proposal Details The proposal is spearheaded by Representatives Josh Gottheimer, a Democrat from New Jersey, and Jen Kiggins, a Republican from Virginia. Their initiative seeks to extend and modify the existing tax credits associated with the ACA. According to reporting from The New York Times, the measure would necessitate two separate votes in Congress. The first vote would focus on extending the tax credits for one year, incorporating modifications that include a new income limit. The second vote would aim to implement more substantial reforms, which could potentially involve eliminating $0 premiums, with exceptions made for those who require need-based support. During a press conference announcing the proposal, Congressman Jeff Van Drew, who notably switched his party affiliation from Democrat to Republican, defended the necessity of the subsidies despite his previous criticisms of the ACA. The recent agreement between the Trump administration and pharmaceutical companies Eli Lilly and Novo Nordisk aims to expand affordable coverage for obesity drugs, a move that has been met with both praise and skepticism. While the initiative is expected to lower the prices of popular drugs like Ozempic and Wegovy, critics argue that the deal may ultimately benefit the pharmaceutical companies more than consumers. Explainer Trump Administration Reassesses Approach to Sanctuary Officials What the Trump obesity drug deal promises The announced that prices for Ozempic and Wegovy would decrease significantly, from $1,000 and $1,350 per month to $350 through a new direct-to-consumer platform called TrumpRx, set to launch next year.

What's at stake

Additionally, Medicare prices for these drugs are projected to be $245, which is less than half of the prices proposed by the Biden administration. Supporters of the agreement argue that it could give uninsured or underinsured patients access to treatments that were previously out of reach, potentially improving for millions of Americans struggling with obesity. Why analysts say Big Pharma still comes out ahead However, a Wall Street Journal analysis suggests that these advertised discounts may not reflect the true cost dynamics in the pharmaceutical market. The effective prices that pharmaceutical companies receive after accounting for rebates and discounts are reportedly only 20% to 35% lower than current Medicare payments for Mounjaro, a drug used for diabetes. The direct-to-consumer model is expected to benefit those without insurance coverage for GLP-1 drugs, who currently face inflated prices. Yet, the pharmaceutical companies may only experience a modest reduction in net revenue. Analysts note that the companies are shifting their profit strategy from high margins on fewer customers to lower margins on a larger customer base, which could ultimately enhance their market position. An axiom attributed to libertarian commentator P.J. O’Rourke argues, 'If you think health care is expensive now, wait until you see what it costs when it’s free!' Two recent studies illustrate the veracity behind this statement and provide additional reasons for Congress not to pass another Obamacare bailout costing $350 billion plus interest.

Explainer GOP Should Fix Health Care Rather Than Bailing Out Obamacare An analysis by the Joint Economic Committee’s Republican staff found that 'a substantial portion of the increase in government spending' since the enhanced subsidies went into effect in 2021 'is likely accruing to producers and intermediaries.' It cites a previous study on the original to provide the economic reasoning behind its claims. The JEC paper, using data from the earlier study, concludes that consumers received only 34 cents of every dollar in federal subsidy spending via lower net premiums. Insurers received more economic value than consumers—38 cents on the dollar—because the subsidies, by making coverage more 'affordable,' give them leverage to raise rates and capture more federal subsidy dollars, particularly in uncompetitive insurance markets. The other 28 cents constitute a deadweight loss because higher premiums discourage enrollment. The JEC analysis finds that, even as subsidy spending has exploded since the introduction of the enhanced subsidies, the overwhelming majority of the benefits go to insurers or are destroyed by deadweight losses, rather than helping consumers themselves. A separate study by Matthew Fiedler of the Brookings Institution examined the effects of zero-dollar premiums on enrollment. What to watch next is whether new filings, agency actions, votes, or court decisions change the timeline—and how officials respond in the weeks ahead.

Why it matters

The coverage highlights: House Republicans Propose Extension of Obamacare Subsidies Amid Internal Discontent. The coverage highlights: Why Trump's Obesity Drug 'Deal' Will Help Big Pharma Most Of All. The coverage highlights: Raising ‘Free’ Obamacare Premiums To $1 Could Save $7B A Year. The coverage highlights: House Democrats Pursue Discharge Petition for Obamacare Subsidy Extension. The coverage highlights: Newsom's Ex-Chief Of Staff Indicted For Fraud Scheme. The coverage highlights: Why Republicans Should Resist The Urge To Bail Out Obamacare.

Key facts & context

2025-12-05: House Republicans Propose Extension of Obamacare Subsidies Amid Internal Discontent. 2025-11-25: Why Trump's Obesity Drug 'Deal' Will Help Big Pharma Most Of All. 2025-11-20: Raising ‘Free’ Obamacare Premiums To $1 Could Save $7B A Year. 2025-11-18: House Democrats Pursue Discharge Petition for Obamacare Subsidy Extension. 2025-11-13: Newsom's Ex-Chief Of Staff Indicted For Fraud Scheme. 2025-11-12: Why Republicans Should Resist The Urge To Bail Out Obamacare. 2025-11-05: Democrats Advocate for Extended Health Insurance Subsidies Amid Government Shutdown. 2025-10-30: Congress Faces Decision on Enhanced Obamacare Subsidies. 2025-10-28: Obamacare’s ‘Free’ Preventive Care Is A Total Failure. 2025-10-14: CBO Data Shows We Can't Afford To Extend Obamacare Subsidies.

Timeline & key developments

2025-12-05: House Republicans Propose Extension of Obamacare Subsidies Amid Internal Discontent. 2025-11-25: Why Trump's Obesity Drug 'Deal' Will Help Big Pharma Most Of All. 2025-11-20: Raising ‘Free’ Obamacare Premiums To $1 Could Save $7B A Year. 2025-11-18: House Democrats Pursue Discharge Petition for Obamacare Subsidy Extension. 2025-11-13: Newsom's Ex-Chief Of Staff Indicted For Fraud Scheme. 2025-11-12: Why Republicans Should Resist The Urge To Bail Out Obamacare. 2025-11-05: Democrats Advocate for Extended Health Insurance Subsidies Amid Government Shutdown. 2025-10-30: Congress Faces Decision on Enhanced Obamacare Subsidies. 2025-10-28: Obamacare’s ‘Free’ Preventive Care Is A Total Failure.

Primary sources

• cbo.gov PDF
• cbo.gov PDF

Further reading & references

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