A new preliminary report from the Government Accountability Office (GAO) has found significant waste, fraud, and abuse in Affordable Care Act (ACA) marketplace plans. The GAO’s investigation revealed that systemic failures have allowed fake identities, deceased individuals, and improper use of Social Security numbers to receive subsidies under the ACA.
According to the report, GAO investigators created fictitious identities using fake or never-issued Social Security numbers and were still able to obtain subsidized ACA coverage. In late 2024, all fake applicants submitted by GAO were approved for coverage, and 90 percent continued to receive coverage into 2025. The analysis found that these practices result in federal spending on subsidies for enrollees who are not eligible and can cause harm to consumers through loss of access to providers or medications, higher out-of-pocket costs, or repayment obligations if eligibility was misrepresented.
The investigation was requested by Committee on Energy and Commerce Chairman Brett Guthrie (KY-02), Committee on Ways and Means Chairman Jason Smith (MO-08), and Judiciary Committee Chairman Jim Jordan (OH-04).
“For years, we were told we could keep our plan, keep our doctor, and premiums would go down. None of it happened. This new report confirms what we already knew: under Obamacare, hardworking Americans saw their premiums skyrocket and their healthcare choices shrink, all while fraud benefitted insurance companies. Obamacare was built on lies and broken promises that hurt families and drove up costs," said Congressman Jim Jordan.
Congressman Brett Guthrie stated: “Republicans have consistently prioritized protecting patients and taxpayers by ridding our federal health programs of the waste, fraud, and abuse that ultimately drive up costs for patients. 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, and artificially masked the true health care affordability crisis plaguing Americans today. 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.”
Congressman Jason Smith added: “While Democrats defend waste, fraud, and abuse, Republicans are taking action to lower health care costs and protect care for all real, living Americans. 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. While Obamacare fraud is being confirmed by GAO, CMS, CBO and other outside reports, patients are suffering. They face higher health care costs and denied claims or delayed care when their providers struggle to verify which insurance is valid due to these fraud schemes. Rather than simply rubber stamp more bad spending and failed policies,we must take action to prevent further harm.”
The GAO examined improper payments within ACA marketplaces based on analysis from both the Congressional Budget Office (CBO) as well as independent research organizations. Estimates suggest millions may be enrolled improperly in ACA marketplaces each year—costing taxpayers up to $27 billion annually in improper payments.
Investigators found several issues:
- Fictitious identities with fraudulent Social Security numbers received subsidized coverage.
- All fake applicants submitted in late 2024 were approved; most remained covered into 2025.
- Some brokers bypassed verification procedures.
- One Social Security number was used across over 125 policies spanning an equivalent of 71 years.
- In 2023 alone,$21 billion in subsidies were paid without evidence of tax reconciliation—representing about a third of all advanced premium tax credits issued.
- Subsidies continued for deceased individuals; at least $94 million went toward covering people who had died before coverage began.
- Unauthorized plan switches harmed consumers; CMS received over a quarter-million complaints between January–August 2024 regarding enrollment changes made without consent.
GAO has previously warned about risks related to subsidy eligibility controls since at least 2015 but reported little progress addressing those weaknesses.
Republican lawmakers say they have taken steps aimed at reducing such problems through reforms like requiring full income verification before issuing subsidies,endingsome forms of open enrollment abuse,and closing loopholes relatedto non-citizen eligibility.CBO estimates indicate these measures have saved taxpayers $185 billion so far while slightly reducing average premiums.
