A new report from the Government Accountability Office (GAO) has revealed significant vulnerabilities in the Affordable Care Act (ACA) health insurance marketplace, showing that federal auditors were able to secure subsidized coverage for fictitious individuals. The investigation highlights ongoing challenges in preventing fraud within the federal program.
The findings, released Wednesday, detailed how investigators successfully used fake identities and Social Security numbers to enroll nearly two dozen non-existent applicants in ACA plans during the 2024 and 2025 enrollment periods, raising questions about the verification processes currently in place.
Key Takeaways
- Federal auditors successfully obtained subsidized ACA coverage for fictitious individuals using fake identities.
- The investigation found nearly 66,000 Social Security numbers were used multiple times during the 2024 plan year.
- The report has intensified the political debate over the renewal of enhanced ACA tax credits set to expire this year.
- The Centers for Medicare & Medicaid Services (CMS) plans to update its fraud risk assessment practices by the end of 2025.
Undercover Investigation Reveals System Flaws
The GAO conducted an undercover operation to test the integrity of the ACA marketplace's enrollment and verification systems. Auditors created fictitious applicants, complete with fabricated identities and Social Security numbers, and attempted to enroll them in subsidized health plans.
The results were concerning. Between November and December 2024, the GAO team successfully obtained coverage for four of these non-existent individuals. The value of the subsidies for these four fake applicants alone was approximately $2,300 per month.
This successful penetration of the system demonstrates that the controls designed to verify applicant identities and eligibility for financial assistance can be bypassed. The report suggests that these weaknesses could be exploited on a much larger scale, leading to significant financial losses for the federal government.
Widespread Data Anomalies Discovered
Beyond the undercover tests, the GAO's analysis of marketplace data uncovered broader patterns of potential misuse. The investigation identified a startling number of duplicate Social Security numbers being used for enrollment.
Specifically, the report found that nearly 66,000 Social Security numbers were used multiple times to secure more than one year's worth of health insurance coverage during the 2024 plan year alone. This suggests a systemic issue where a single identity marker could be leveraged to obtain multiple subsidized policies, a clear indicator of potential fraud or system error.
By the Numbers
- $2,300/month: Value of subsidies obtained for just four fictitious applicants.
- ~24: Number of fictitious individuals successfully enrolled by auditors.
- 66,000: Number of Social Security numbers used multiple times in the 2024 plan year.
- 2025: The year CMS plans to update its fraud risk assessment protocols.
These data anomalies point to weaknesses in the cross-verification systems that are supposed to catch such discrepancies. While some instances may be due to clerical errors, the sheer volume of repeated numbers raises red flags for organized fraudulent activity.
Political Fallout and Calls for Reform
The GAO's findings have immediately entered the political discourse on Capitol Hill, particularly as lawmakers debate the future of enhanced ACA subsidies. These tax credits, which lower insurance premiums for millions of Americans, are scheduled to expire at the end of this year.
Republicans have seized on the report as evidence of waste and abuse within the program. House Energy and Commerce Committee Chair Brett Guthrie, a Republican from Kentucky, stated that the findings confirm the necessity of GOP efforts to secure federal health programs.
"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," Guthrie said in a statement.
Democrats, while acknowledging the report's concerning nature, have shifted the focus. Representative Lloyd Doggett of Texas suggested that rhetoric from the previous administration could be a contributing factor.
The debate over the subsidies is now intertwined with the issue of program integrity, with both sides using the GAO report to argue for their respective policy positions.
What's at Stake: Enhanced Subsidies
The enhanced tax credits, originally expanded as part of COVID-19 relief measures, have made ACA marketplace plans more affordable for a broader range of incomes. If Congress does not act to extend them, millions of enrollees could face significant premium increases in 2025. The GAO's findings on fraud add a new layer of complexity to the legislative debate over their renewal.
The Path Forward: Strengthening Verification
In response to the investigation, the Centers for Medicare & Medicaid Services (CMS), the agency that oversees the ACA marketplace, has acknowledged the need for stronger anti-fraud measures.
The GAO report noted that CMS plans to update its fraud risk assessment practices. This comprehensive review is expected to be completed by the end of 2025. The goal is to implement more robust verification processes that can detect and prevent fraudulent applications before subsidies are paid out.
Potential changes could include enhanced identity verification technologies, more rigorous cross-checks with other federal databases, and improved data analytics to flag suspicious enrollment patterns. The challenge for CMS will be to implement these stronger controls without creating excessive barriers for legitimate applicants who need access to health coverage.
