A new preliminary report from the Government Accountability Office (GAO) has revealed extensive issues with waste, fraud, and abuse in Affordable Care Act (ACA) marketplace plans. The investigation highlights how improper subsidies have been provided to fake identities, deceased individuals, and through misuse of Social Security numbers, resulting in significant costs to taxpayers and challenges for consumers.
The GAO's analysis included covert operations where investigators created fictitious identities using fake or unissued Social Security numbers. These identities were able to obtain subsidized ACA coverage without proper verification. According to the report, 100 percent of fake applicants were approved by the ACA Marketplace as recently as late 2024, with 90 percent continuing to receive coverage into 2025.
Such practices have led to federal spending on subsidies for ineligible enrollees. Consumers may also face unexpected costs such as higher copayments and deductibles or loss of access to medical providers if eligibility is 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).
“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,” said Chairman Guthrie. “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.”
Chairman 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,” said Chairman Smith. “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.”
Chairman Jordan stated: “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.”
The GAO found that millions may be improperly enrolled in ACA marketplaces each year—at a potential cost of $27 billion annually in improper payments.
Key findings include:
- Fictitious identities created with invalid Social Security numbers were able to receive subsidized coverage.
- In late 2024 all fake applicants tested received approval; most continued receiving subsidies into 2025.
- One Social Security number was used across over 125 insurance policies spanning a total period equivalent to 71 years.
- In 2023 alone $21 billion in subsidies went out without evidence of required tax reconciliation.
- At least $94 million was paid out as subsidies for deceased individuals using matched death records.
- Unauthorized plan switches resulted in hundreds of thousands of complaints from consumers who did not consent.
Past warnings about vulnerabilities within subsidy systems date back several years but were not addressed with effective controls according to repeated GAO reports.
Republican lawmakers say they are pursuing reforms including stricter income verification before issuing subsidies; ending flexible enrollment periods prone to abuse; closing loopholes related to eligibility requirements; and improving accountability mechanisms across marketplaces.
Estimates from the Congressional Budget Office suggest these reforms have already resulted in substantial taxpayer savings—$185 billion—and contributed modestly toward lowering average premium rates.
