OBBB Event Recap, Research on Medicaid Work Requirements, Action on Short-Term Plans, and More

Last week, Paragon hosted a virtual event on the One Big Beautiful Bill (OBBB). In this week’s newsletter, I review that event, discuss a new research paper on the effect of Arkansas’s work requirements on health measures, explain our methodology for calculating the widespread improper enrollment in the exchanges, highlight an announcement from the Trump administration on short-term plans, and review a new study showing much higher health care spending when hospitals employ physicians.

Explaining The One Big Beautiful Bill

Last week, Ryan Long, Elle Minarik, and I reviewed the key health policy reforms of the OBBB in a virtual event. More than 300 people joined the live event—thank you for making time. During the event, I spent 15 minutes reviewing the main components of the OBBB—including new Medicaid work requirements, limits on Medicaid money laundering, and stronger program integrity measures in Medicaid and the Affordable Care Act (ACA). We received more than 80 substantive questions and answered as many as we could. For more information on the OBBB’s health policy reforms, visit our dedicated webpage, which has our summary of the legislation as well as our fact sheets that debunk common myths.

Arkansas’ Medicaid Work Requirements Associated with No Significant Changes in Health Measures

The OBBB included the first-ever nationwide community engagement requirements for able-bodied, working-age individuals on Medicaid, added by the ACA. These measures require eligible enrollees to work, volunteer, or attend school or job training for at least 80 hours per month to remain in the program, ensuring Medicaid serves as a temporary safety net, not a long-term entitlement. Some argue these requirements harm health by causing coverage loss and delaying care. A new Paragon study finds no evidence to support this claim.

Paragon fellows Liam Sigaud and Eric Sun analyzed data from Arkansas, which implemented Medicaid community-engagement requirements for about nine months in 2018 and 2019. Using hospital data, they compared preventable hospitalizations and ER visits (e.g., uncontrolled diabetes or asthma) for adults subject to the work requirements and similar exempt adults. Liam and Eric found no statistically discernible effects from community-engagement requirements on any of the health measures. Although this analysis can only shed light on the policy’s short-term effects, these findings suggest that the OBBB’s modest community-engagement requirements will not adversely affect health care access or population health. As we discussed in last week’s event, work improves health, builds community, and leads to upward mobility.

Defending the Estimates in The Greater Obamacare Enrollment Fraud

In 2024, The Great Obamacare Enrollment Fraud exposed massive ACA exchange fraud. Unfortunately, the sequel to that paper shows the problem worsened. The 2025 sequel, The Greater Obamacare Enrollment Fraud, revealed a sharp escalation in already excessive improper enrollment in the ACA exchanges. Using official government data on exchange enrollment and Census Bureau state-level population data, we estimate that 6.4 million ineligible individuals were enrolled in 2025—costing taxpayers over $27 billion this year.

Our methodology was sound. We compared the number of people who signed up for ACA coverage while claiming incomes between 100 and 150 percent of the federal poverty line (FPL) with eligibility estimates from the American Community Survey—the largest annual survey conducted by the Census Bureau. People in this income range qualify for zero-premium, fully subsidized ACA plans, and enrollment in this group surged under Biden-era policies. In 2025, nearly half of all exchange enrollees took no action during open enrollment and were automatically re-enrolled—perpetuating improper coverage for years.

Critics—often stakeholders benefiting from large ACA subsidies—have challenged our methodology. In a new Paragon Prognosis, Liam Sigaud and Niklas Kleinworth rebut these claims and show why our estimates, if anything, understate the problem:

• Data Validity & Timing: Other frequently cited reports rely on outdated or narrow datasets from before the recent explosion in enrollment. In addition, some of them only count whether the paperwork was properly filled out, not whether the information on the paperwork turned out to be erroneous. In contrast, Paragon uses the most recent and comprehensive data available, covering the post-COVID credit expansion era.
• Combining Year-Over-Year Data: Some of our critics claim that combining different years of data invalidated our analysis. Using data from different years is standard statistical practice, and the very organization leveling this accusation recently published an analysis using data from two different years. Where necessary, we applied minor adjustments—typically altering state-level results by about one percent or less—to account for population changes and ensure accurate comparisons.
• Fraud vs. Mistakes: The enrollment surges in the 100 to 150 percent of FPL, paired with policy changes that weakened verification requirements, point conclusively to systemic fraud, often facilitated by unscrupulous brokers and insurers.

Paragon’s work has already influenced federal rulemaking. CMS’s recent program integrity rule cited our 2024 report six times and incorporated elements of our methodology. The OBBB codifies several reforms drawn from our findings—such as prohibiting enrollment and automatic re-enrollment without verifying income and other eligibility information.

Expanding Affordable Health Coverage through Short-Term Plans

On August 7, the Departments of Labor, Health and Human Services (HHS), and the Treasury released a statement that “the Departments intend to exercise their authority under the Internal Revenue Code, the Employee Retirement Income Security Act, and the [Public Health Service] Act to undertake notice-and-comment rulemaking to consider the need for amendments to the regulatory definition of ‘short-term, limited-duration insurance.’” Until future rulemaking is applicable, the two departments announced they do not intend to prioritize enforcement actions for violations of the Biden administration’s 2024 rule restricting short-term plans, encouraging states to adopt a similar approach to enforcement.

Short-term plans offer an attractive source of health insurance—often with much lower premiums and much more extensive provider networks—than ACA plans. Unfortunately, the past two Democratic administrations punished Americans who found this coverage valuable—restricting the amount of permissible contract periods to only a few months. A 2018 Trump administration rule restored the historical contract period of 364 days, permitting renewals up to three years. I authored a 2023 study that found that states that fully permitted short-term plans had much better trends—in terms of premiums, enrollment, and insurer participation—in their ACA individual market than states that restricted short-term plans.

New Study Shows Hospital-Employed Doctors Drive Spending Higher

A new Journal of Market Access & Health Policy study shows why site-neutral payment policies are needed to cut unnecessary spending. The study finds much higher spending by doctors if they are employed by hospitals. Hospital-employed doctors were the least likely to use lower-cost settings like ambulatory surgery centers (ASCs) or physician offices, while private equity–affiliated doctors were the most likely.

Researchers analyzed 2022 Medicare and commercial insurance claims for 32 common outpatient procedures in cardiology, gastroenterology, orthopedics, and urology.

The price gap is striking:

• Medicare: Hospital outpatient departments (HOPDs) cost 124–861% more than ASCs or offices.
• Commercial insurance: Costs were 111–1,346% higher in HOPDs.

These differences are driven mainly by facility fees, not physician pay. Even after adjusting for patient age, income, and health, the pattern is held. The authors recommend site-neutral payment policies to curb wasteful spending and lower costs for patients and taxpayers.