A scathing new Government Accountability Office (GAO) report identified rampant fraud and systemic failures in the Affordable Care Act (ACA) marketplace just as Congress is battling over the future of Obamacare’s enhanced premium subsidies.
The report, released Wednesday, revealed that fictitious identities, invalid Social Security numbers, and even deceased individuals were easily approved for taxpayer-funded subsidies. Every single application investigators submitted using fabricated or invalid Social Security numbers in 2024 was approved for coverage.
“Republicans have sounded the alarm on the flawed structural integrity of Obamacare and how Democrats’ failed policies to temporarily prop up the program have exacerbated fraud, hurt patients, increased the burden on American taxpayers,” Rep. Brett Guthrie (R-KY), chairman of the Energy and Commerce Committee and one of the members who requested the GAO investigation, said in a statement.
“The concerning findings from GAO’s report further confirm that Republican efforts to strengthen, secure, and sustain our federal health programs are critical and necessary to ensure access to quality health care at prices Americans can afford,” Guthrie added.
The month-long government shutdown that ended just before Thanksgiving stemmed largely from Democrats’ refusal to budge on the expiring Obamacare premium subsidies, which they passed without a single Republican vote in 2021 and set to expire at the end of 2025.
Those subsidies were originally limited to households earning between 100% and 400% of the federal poverty level. However, Democrats removed the upper-income cap and increased the subsidy amounts, and in some cases reduced premiums to zero.
Fraud is especially widespread among enrollees reporting incomes between 100% and 150% of the federal poverty level, who qualify for zero-premium plans. Critics say zero-premium plans create opportunities for bad actors to sign up unsuspecting victims without their knowledge.
In nine states, the number of sign-ups at that income level exceeded the number of eligible residents, according to a joint report from the Foundation for Government Accountability and the Paragon Health Institute.
GAO’s undercover investigation found that 100% of the fictitious applications it submitted were approved in late 2024, and 18 out of 20 fake applicants were still receiving subsidized coverage for 2025. ACA marketplaces approved coverage even when no documents were requested, or fake documents were submitted, including those related to the applicants’ citizenship status.
“GAO’s troubling report is the smoking gun that shows how this broken system, shielded by Democrat policies, has led to the federal government shoveling tens of billions of tax dollars to insurance companies through identity fraud and caused health care costs to skyrocket for all Americans,” said Republican Rep. Jason Smith of Missouri, who chairs the House Ways and Means Committee.
The government watchdog also uncovered 66,000 Social Security numbers with more than a year’s worth of subsidized coverage in 2024, including one number used for the equivalent of 71 years of coverage — in a single plan year.
Centers for Medicare & Medicaid Services (CMS), which manages the ACA marketplace, does not block new applications using the same Social Security number, according to the report.
Additionally, 58,000 SSNs receiving benefits in 2023 matched Social Security death data, resulting in $94 million in taxpayer-funded subsidies being sent to health insurers on behalf of deceased individuals.
“For years, we were told we could keep our plan, keep our doctor, and premiums would go down. None of it happened,” Judiciary Committee Chairman Jim Jordan said in a statement. “This new report confirms what we already knew: under Obamacare, hardworking Americans saw their premiums skyrocket and their healthcare choices shrink, all while fraud benefited insurance companies.”
CMS did not respond to the Daily Caller News Foundation’s request for comment.
Democrats, meanwhile, warn that without extending the expanded subsidies, millions of Americans will face steep premium hikes and loss of coverage.
ACA premiums are projected to rise by 20% on average in 2026, but Paragon’s earlier analysis found that the expiring subsidy would account for just 3.3% of those premiums. The group also found that Obamacare plan premiums have grown nearly twice as fast as employer-sponsored plans since the ACA took effect.
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