Scamming Obamacare (Legally)

Standard

There is an awesome provision in Obamacare (thoroughly inappropriately named the Affordable Care Act) that will allow anyone who receives a subsidy to scam the system.

Here’s how it works: Pay your subsidized premium for one month, then stop paying. Under the law, you must continue to be covered for three additional months, referred to as the grace period. That’s buy one, get three free!

I’m sure the intent behind this was good.  If someone unexpectedly loses a job and can’t pay the health insurance premiums, the family is still covered. However, it’s obvious that this provision will be abused extensively. There is no way to differentiate between those who legitimately cannot pay, and those who choose not to pay.

During the first month of the grace period, the insurance company must still pay the person’s claims. In the second and third months, the insurance company doesn’t have to pay the claims, and the providers of health care services (doctors and hospitals) will be stuck with the costs of providing care. They can try to collect, but good luck with that.

It the person wants back into health insurance through the exchange, they have to wait until the next open enrollment period to get back in. Under the current rules, someone could pay for insurance for 9 months, then stop paying, be covered for the three month grace period, and start all over at the beginning of the next year. The person could habitually pay for 9 months of coverage, and get 12 months of coverage. There is currently nothing in place to stop this type of abuse.

Leave a Reply