It All Adds Up

The High Cost of Health Insurance Exchange Regulations Under the Biden Administration

Preview:

It All Adds Up assesses the impact of the Biden administration’s regulations for Affordable Care Act (ACA) Exchanges on individual market premiums, the cost to the federal taxpayer, and the level of improper enrollments. The report assesses the costs of ACA regulations to the unsubsidized enrollees in the individual market and then adds up the cost to the federal taxpayer based on the estimates each regulation provides in its regulatory impact analysis. Lastly, the report discusses how the regulations contributed to a dramatic rise in fraud and abuse across the Exchanges.

Key findings from the report include:

• According to the regulatory impact analyses used to support the rules, the current administration estimates five regulations will increase premiums on unsubsidized enrollees by up to 8.6 percent. The report documents another nine regulations that will increase premiums even higher.
• Fifteen regulatory changes lead to a substantial increase in federal expenditures, almost entirely through higher spending on premium subsidies.
• In 2026, the first year when all of the Biden administration ACA regulations are projected to be in effect, these regulations are projected to cost the federal taxpayer $9.9 billion. This estimate is based on the cost estimates the administration provided in each rule to justify each of the ACA regulations.
• Over a 10-year period from 2026 to 2035, these ACA regulations are estimated to increase federal spending by $108 billion.
• Many of the ACA regulations contributing to higher premiums and federal spending also increase the level of fraudulent and improper enrollments in subsidized coverage through the Exchanges. Seven regulations and two guidance documents increase incentives and opportunities for improper enrollments.
• Because the regulations generally and incorrectly assumed they would not weaken program integrity, the main cost estimates in this report do not account for the higher level of improper enrollments in subsidized Exchange coverage.
• Research suggests these improper enrollments increased federal costs by up to $26 billion in 2024. Updated enrollment and cost estimates for 2024 from the Congressional Budget Office reinforce this estimate.
• The Biden administration’s agenda to maximize enrollment at any cost is not just a federal spending issue. There is a human toll. It can create huge headaches with potential legal and financial implications for anyone who is enrolled without their consent or inadvertently receives APTC overpayments.

A full copy of the report can be viewed here.