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Tag: Billion

  • Billion in Rural Health Funding Won’t Reopen Martin County’s Closed Hospital — Here’s What the Fine Print Actually Says

    $50 Billion in Rural Health Funding Won’t Reopen Martin County’s Closed Hospital — Here’s What the Fine Print Actually Says

    Stanley Sears was 50 years old when he had a heart attack in Martin County, North Carolina. Emergency crews from a neighboring town worked on him for half an hour, but couldn’t revive him for the long drive to the closest hospital. Martin County’s only hospital had closed a year before his death.

    His sister, Debra Pierce, still wonders. “The sad thing is we’ll never know if he could have been saved that night or not, because we don’t have a higher level of care in this county,” she told KFF Health News reporter Sarah Jane Tribble.

    In the political moment following the passage of the One Big Beautiful Bill Act, the story of Martin County is being told differently by different people. Republicans point to the $50 billion Rural Health Transformation Program included in the bill as evidence that rural communities will be helped. Martin County Manager Drew Batts, who has walked through the shuttered corridors of Martin General Hospital with federal and state lawmakers, has a simpler assessment: “The $50 billion is not something that is specifically going to help our situation. It’s not going to help us get this place reopened.”

    He is correct. And the reasons why are an object lesson in the gap between what a federal health fund promises and what it can actually deliver.

    What the $50 Billion Rural Health Fund Is — and What It Isn’t

    According to KFF’s comprehensive analysis of the fund, the Rural Health Transformation Program was added to the One Big Beautiful Bill Act in response to concerns from lawmakers representing rural states about the bill’s massive Medicaid cuts. The fund provides $10 billion per year over five years (fiscal years 2026–2030), for a total of $50 billion. CMS has broad discretion over distribution and — critically — those distribution decisions are not subject to administrative or judicial review.

    The fund’s structural design creates several limitations that directly affect communities like Martin County:

    Limitation 1: The fund goes to existing organizations, not to closed facilities. North Carolina distributes its $213 million first-year allocation among existing health and social service organizations. As KFF Health News reported, federal regulations set limits on how much can be spent on construction and building renovations. Martin General Hospital isn’t open — so it isn’t an existing organization that can receive funds.

    Limitation 2: The hub-and-spoke distribution model concentrates money in larger systems. North Carolina’s plan creates a hub-and-spoke model that allots money to six large regional leads, including nonprofits such as ECU Health’s affiliate Access East. Those hubs then distribute to local entities. ECU Health’s affiliate did win a portion of North Carolina’s first-year payout — but the federal money cannot be used to reopen Martin General, according to ECU Health’s Chief Operating Officer Brian Floyd.

    Limitation 3: The fund is temporary; the Medicaid cuts are not. KFF analysis shows the $50 billion could offset approximately 37% of the estimated cuts to federal Medicaid spending in rural areas ($137 billion over ten years). But while the rural health fund is limited to five years, nearly two-thirds of the ten-year reductions in federal Medicaid spending occur after fiscal year 2030 — meaning the fund’s support runs out before most of the damage it’s supposed to offset materializes.

    Limitation 4: The math doesn’t work for the most rural communities. KFF analysis shows that Connecticut (with 3 rural hospitals by one definition) could receive the same amount as Kansas (with 90 rural hospitals) if both states are approved for funding. The allocation formula gives equal weight to states regardless of rural hospital density, diluting the fund’s impact in states most desperately in need.

    $50 Billion Rural Health Fund — Key Facts Detail
    Total fund size $50 billion ($10B/year for FY 2026–2030)
    Authorizing legislation One Big Beautiful Bill Act
    CMS discretion over distribution Broad; not subject to administrative or judicial review
    NC first-year allocation $213 million
    Distribution model in NC Hub-and-spoke; six large regional lead organizations
    Can NC funds reopen Martin General? No — federal rules limit construction; hospital must be operational
    Fund’s offset of rural Medicaid cuts ~37% of estimated $137B in rural Medicaid cuts over 10 years
    Timing mismatch Fund runs FY 2026–2030; 64% of Medicaid cuts come after FY 2030
    Martin County’s situation 22,000 residents; no hospital since 2023; no paramedics on ambulances
    Distance to nearest ER 20+ miles
    ECU Health projected Medicaid cut impact $1 billion over 10 years (CEO testimony)

    What Martin County Actually Needs — and What It Would Take

    ECU Health signed a letter of intent to reopen Martin General as a rural emergency hospital (REH) — a federal designation that allows smaller facilities to operate with 24-hour emergency services and outpatient care but without inpatient beds. Under that plan, Martin County would pay to refurbish the hospital, and the North Carolina General Assembly would need to provide ECU Health with $210 million — of which $150 million would fund construction of a new inpatient tower at ECU’s Beaufort Hospital.

    That legislative appropriation has not materialized. And even if it did, Representative Don Davis, whose district encompasses Martin County, told KFF Health News the rural health fund money “is essentially putting a band-aid on a much, much broader situation that needs dire help.” Davis has introduced legislation to increase Medicaid reimbursements for rural hospitals — the structural fix that would prevent hospital closures — but it has not moved forward.

    The closure of Martin General in August 2023 was abrupt. Employees were not notified. Patients being treated were wheeled out on stretchers and transported to other facilities. The company operating the county-owned hospital, Quorum Health, did not notify local elected leaders before filing for bankruptcy.

    Martin County also does not have paramedics on its ambulances — only emergency medical technicians (EMTs), who have a more limited scope of practice. The closest emergency rooms are 20 miles or more away, often overcrowded. One woman told KFF Health News she drove 2.5 hours from a small town near the Outer Banks so her 79-year-old aunt could get care at an ECU Health ER in Greenville — and was told to wait outside because of capacity issues.

    “It’s a real healthcare crisis that has already proven itself to have lost lives that perhaps didn’t have to be lost,” said ECU Health COO Brian Floyd. “They just want to not die because there’s nowhere to go when you have an emergency.”

    Frequently Asked Questions

    What is the $50 billion rural health fund?

    The Rural Health Transformation Program, included in the One Big Beautiful Bill Act, provides $10 billion per year for five years (FY 2026–2030) for rural health. CMS has broad discretion over distribution, and distribution decisions are not subject to administrative or judicial review.

    Why won’t the fund reopen Martin County’s hospital?

    Because the fund is distributed to existing health and social service organizations, and federal regulations limit how much can be spent on construction and renovation. Martin General Hospital closed in 2023 — it is not an existing operational facility that can receive funding. Martin County’s situation requires capital investment in a closed hospital that the fund’s design specifically does not accommodate.

    Does the $50 billion offset the Medicaid cuts in the same bill?

    Only partially. KFF estimates the fund could offset approximately 37% of the $137 billion in estimated cuts to federal Medicaid spending in rural areas over ten years. Critically, the fund runs through FY 2030, but nearly two-thirds of the Medicaid cuts occur after that — meaning the fund’s support ends before most of the cuts’ impact materializes.

    What happened to Martin County’s hospital?

    Martin General Hospital, the county’s only hospital, closed abruptly in August 2023 when the company operating it (Quorum Health) filed for bankruptcy without notifying local elected leaders or staff. Patients were wheeled out on stretchers. The county has approximately 22,000 residents with no hospital, no paramedics on ambulances, and emergency rooms 20+ miles away.

    What would it take to reopen Martin General?

    ECU Health has a letter of intent to reopen it as a rural emergency hospital (REH), but the plan requires the North Carolina General Assembly to appropriate $210 million to ECU Health and Martin County to fund building refurbishment. Those appropriations have not materialized. ECU Health’s CEO has separately warned the system expects to lose $1 billion over the next 10 years from Medicaid cuts under the One Big Beautiful Bill Act.

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  • ACA Enrollment Fraud Now Tops 6 Million — And Taxpayers Are Footing a Billion Bill

    ACA Enrollment Fraud Now Tops 6 Million — And Taxpayers Are Footing a $27 Billion Bill

    A sweeping new report released today confirms what critics of the Affordable Care Act have warned for years: millions of ineligible individuals are receiving federally subsidized health coverage, draining tens of billions in public funds through a system riddled with structural loopholes and almost no accountability.

    6.2M+
    Improper enrollees (2026 est.)    		 $27B
    Annual taxpayer cost (2025)    		 ~96%
    Fake GAO apps approved (2024-25)

    In what is shaping up to be one of the most significant federal health care accountability stories of the year, the Paragon Health Institute released findings today — confirmed by The Washington Post — estimating that roughly 6.2 million people on the ACA’s health insurance exchanges are improperly enrolled in subsidized coverage. That figure represents approximately one in four of all exchange enrollees, according to the think tank’s analysis.

    The report lands as Congress continues debating the future of COVID-era enhanced subsidies that have ballooned ACA enrollment numbers — numbers now called into serious question by researchers, federal watchdogs, and the courts alike.

    “Roughly a quarter of all ACA exchange enrollees may be receiving coverage they are not entitled to — paid for by American taxpayers.”

    — Paragon Health Institute, June 2026

    HOW IT HAPPENED

    The story of ACA fraud is inseparable from the pandemic. When Congress passed enhanced subsidies in 2021 that effectively made silver and bronze plans free for low-income enrollees, brokers and insurers quickly found ways to exploit the windfall. Income verification requirements were loosened. Enrollment could be triggered through Direct Enrollment pathways with minimal scrutiny. And crucially, the financial penalty for overstating income — and thus receiving excess subsidies — was capped so low it created almost no deterrent.

    The result, according to Paragon’s research, was a surge in fraudulent sign-ups driven by three overlapping groups: enrollees who deliberately misstated their income; unscrupulous brokers who falsified applications to earn commissions; and a class of enrollees who were signed up entirely without their knowledge or consent, with insurers and agents pocketing the subsidy payments.

    The scale of that last category is particularly alarming. Centers for Medicare and Medicaid Services (CMS) data show that nearly 12 million ACA enrollees — 35% of all exchange participants — filed zero medical claims in 2024, up from just 3.5 million in 2021. Researchers describe many of these as “phantom enrollees”: people who have no idea they are technically covered, or who have other insurance entirely.

    GOVERNMENT’S OWN TESTS CONFIRM THE HOLES

    The Government Accountability Office (GAO) conducted two rounds of undercover testing — and the results were stunning. In the first round, GAO submitted four fictitious applications for plan year 2024 using invalid Social Security numbers and fabricated identities. All four were approved, costing approximately $2,350 per month in fraudulent subsidies. In the second round, GAO submitted 20 fictitious applications for plan year 2025; 19 of the 20 were approved and, as of September 2025, 18 were still actively receiving subsidized coverage. Combined across both rounds, the exchange approved 23 of 24 fictitious applications — a 96% failure rate for basic fraud detection.

    The Congressional Budget Office (CBO) added its own corroboration, estimating 2.3 million improper enrollees just among those who overstated their income in the ten states that did not expand Medicaid — a fraction of the total picture. The CBO figure alone exceeds the total coverage losses Democrats claim will result from ending the enhanced subsidies, a point Republicans have seized upon in the ongoing budget debate.

    CRIMINAL PROSECUTIONS MOUNT

    The fraud is not only a policy problem — it is increasingly a criminal one. In February 2025, a federal grand jury indicted Cory Lloyd and Steven Strong for a scheme that sought over $233 million in fraudulent ACA subsidies, of which the federal government paid at least $180 million. Both men targeted vulnerable, low-income individuals — including people experiencing homelessness, unemployment, and substance use disorders — and used street marketers who sometimes offered bribes to induce enrollment. Both were convicted by a federal jury in November 2025 and sentenced to 20 years in federal prison each, with $180.6 million in restitution ordered.

    In April 2026, the Department of Justice announced a separate but related resolution: AP of South Florida (APSF), the brokerage company where Lloyd had continued the scheme, agreed to plead guilty to one count of major fraud against the United States. The federal government had paid $141.5 million in unwarranted subsidies through APSF. In a parallel civil resolution, APSF’s parent company AssuredPartners agreed to pay $135 million to resolve False Claims Act allegations. The combined settlement exceeds $160 million. Court documents revealed that APSF employees stationed street marketers at homeless shelters, bus stops, and drug treatment clinics — sometimes offering cash or gift cards to obtain personal information. Some victims subsequently lost Medicaid access and faced increased costs for HIV medication, opioid treatment, and mental health drugs.

    FLORIDA: GROUND ZERO

    Florida has emerged as the leading state for ACA enrollment fraud. A Paragon county-level analysis found that in nearly every Florida county, ACA enrollment exceeds the estimated eligible population — in some counties by more than eleven times. Note: independent health policy researchers, insurers, and hospital groups have disputed Paragon’s methodology, contending the fraud estimates may be overstated. The state’s combination of high poverty rates, large uninsured populations, and a dense network of commission-driven insurance brokers created conditions that, according to federal prosecutors, allowed large-scale fraud to operate for years.

    WHAT REFORM COULD LOOK LIKE

    Critics of the ACA say the path forward is straightforward but politically difficult: allow the pandemic-era enhanced subsidies to fully expire, raise the subsidy repayment caps that currently let overpaid enrollees keep the excess with little consequence, and restore meaningful income verification requirements at the point of enrollment. CMS under the current administration has signaled support for tighter controls, with Administrator Dr. Mehmet Oz stating in mid-2025 that the agency is “restoring integrity to ACA exchanges by cracking down on fraud.”

    Defenders of the program argue the fraud figures are overstated and that any tightening of enrollment rules will disproportionately harm low-income Americans who legitimately need coverage — a tension that is now at the center of one of Washington’s defining health policy battles. What is no longer in dispute, after years of accumulating evidence from GAO, CBO, CMS, and federal prosecutors alike, is that billions of taxpayer dollars have flowed to people who were never supposed to receive them.

    TIMELINE

    2021–2022 Biden-era COVID subsidies introduced; income verification requirements loosened. Lloyd-Strong and APSF fraud schemes begin operating across Florida.
    June 2024 Paragon publishes ‘The Great Obamacare Enrollment Fraud,’ estimating 5.0 million improper enrollees in 2024 (revised upward to 5.1M in May 2026).
    Dec 2025 Enhanced COVID subsidies expire. GAO releases undercover results: 23 of 24 fictitious applications approved across plan years 2024–2025. Paragon documents 6.4M+ improper enrollees in 2025.
    Feb 2025 DOJ indicts Cory Lloyd and Steven Strong for a scheme seeking $233M+ in fraudulent ACA subsidies (at least $180M paid), targeting homeless individuals and people in treatment programs.
    Nov 2025 Both Lloyd and Strong convicted by federal jury; each sentenced to 20 years and ordered to pay $180.6M in restitution.
    Apr 2026 APSF pleads guilty; AssuredPartners pays $135M civil settlement. DOJ total exceeds $160M — one of the largest ACA fraud resolutions on record.
    Jun 2, 2026 Paragon releases updated estimates: 6.2M+ improper enrollees in 2026, confirmed by Washington Post. Congressional reform debate intensifies.

    SOURCES & KEY LINKS

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