The Fight Over Obamacare’s Phantom Enrollees

More than a dozen Democratic senators are criticizing the Trump administration’s efforts to address the problem of phantom enrollments in Obamacare. In a letter to insurers, the senators accuse the companies of “colluding” with the administration to terminate coverage for more than 760,000 enrollees. Their criticism gets insurers’ financial incentives backward and overlooks the extensive safeguards the Centers for Medicare and Medicaid Services (CMS) employed before terminating these highly suspicious enrollments.

Insurers have little incentive to drop phantom enrollees. For years, insurers have been the biggest beneficiaries of the expanded Obamacare subsidies — reaping tens of billions of dollars in higher subsidies. By making millions of plans free to consumers, Democrats created powerful incentives for improper and phantom enrollment. Given these incentives, the administration was right to scrutinize suspicious enrollments.