Photograph Source: The White House – Public Domain

The Trump administration made a big show of announcing that it was removing 760,000 people from the Affordable Care Act exchanges due to what they contend was rampant fraud. They’re also saying they might have uncovered a few hundred thousand additional fraudsters. As with most other claims coming from the White House, everyone should be skeptical.

There are several ways to commit fraud in the Affordable Care Act marketplaces. The main offenders are unscrupulous brokers who have been caught submitting fake enrollments to get commissions, or switching someone’s plan without their consent. At their press conference, JD Vance and Centers for Medicare and Medicaid Services administrator Mehmet Oz highlighted two such brokers. But this was not new information; both were the subject of Justice Department investigations (much of which presumably happened under the Biden administration) and were sentenced to prison terms for their crimes. Indeed, rooting out fraud is a normal part of federal and state oversight; the Biden administration decertified 200 brokers they found were not complying with existing regulations.

So how did JD Vance’s Task Force to Eliminate Fraud uncover such a large number of fake enrollments? It’s not clear. The administration says it identified people who had been signed up by a broker, and whose premiums were fully paid for via the available tax credits. They instructed insurance companies to contact enrollees who did not have proper documentation or had not filed a claim or otherwise used their health insurance coverage. Those who failed to respond to their insurance company in a timely manner are assumed to be in the ‘fraud’ category.

So are they scammers? One of the main pieces of evidence – made repeatedly by Dr. Oz – is the idea that there is something fishy about people not using their insurance. He pointed out that about 35 percent of enrollees have never used their health insurance, saying “That’s just not possible… So we know there is fraud.”  But as Dean Baker noted back in July when they started floating this theory, that is absolutely possible – in fact, it is exactly what you’d expect.

Not utilizing health care services is not inherently suspicious; healthy people, especially young ones, do not visit the doctor. One study estimated that about 20 percent of insured individuals do not file a claim in a given year. And there are other possible explanations for not using coverage or filing a claim – like a worker who has short term Affordable Care Act coverage while between jobs.

That’s not to say that the White House didn’t turn up some fraudulent accounts; as has always been the case, there are unscrupulous brokers who have figured out how to game the system. But as various media outlets and policy experts have noted, there has been no documentation of what they found, or transparency about this process. The administration is touting a $2.2 billion savings, but it is not clear where that number comes from. Other claims made by the task force have been challenged for being misleading, much like the famous DOGE’s famously dodgy accounting.

The real issue is whether people have lost coverage that they were legally entitled to, merely because of an administrative error or their failure to respond to a form letter from their insurance company.

This first appeared on CEPR.