ACA marketplace allowed fake enrollees, possible fraud, Government Accountability Office says

Lia DeGroot, CQ-Roll Call on Dec 3, 2025

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The federal health insurance exchanges established by the Affordable Care Act allowed the enrollment of fake beneficiaries and the payout of accompanying premium subsidies, a Government Accountability Office report published Wednesday found.

The report, which included identity testing, analysis of Centers for Medicare and Medicaid Services enrollee data and an assessment of CMS’ fraud prevention efforts, found that there could be gaps in the agency’s process to prevent fraudulent enrollment.

As Congress debates whether to extend the enhanced ACA subsidies that keep many enrollees’ costs lower, Republicans have been insisting that fraud in the program has been burning through taxpayer dollars. The report could buttress their arguments that major changes are needed, or at least that prevention measures be a part of any deal on lowering health care costs.

“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,” House Energy and Commerce Chairman Brett Guthrie, R-Ky., said in a statement.

The report was requested by Guthrie as well as House Judiciary Chairman Jim Jordan, R-Ohio, and House Ways and Means Chairman Jason Smith, R-Mo.

At issue are advance premium tax credits — subsidies that the government pays to insurance companies to reduce beneficiaries’ out-of-pocket premium costs.

To test the ease of fraudulent enrollment, GAO created fake identities and attempted to sign them up for federal marketplace coverage for 2024 and 2025.

The report found that coverage was approved for nearly all of the fake accounts. All four of the identities submitted in 2024 were still receiving coverage late into the year, and as of September of this year, 18 of the 20 fake identities submitted for 2025 were still receiving coverage.

The fake applicants in 2024 initially failed an identity-proofing step in the sign-up phase, but false identifying documents later submitted to CMS led to approval. The combined total in tax credits paid on behalf of the 2024 fake enrollees was $2,350 per month.

The full results from the 2025 study will be released at a later date, but the watchdog noted that for the 18 fake beneficiaries that remained actively covered as of September, tax credits totaled more than $10,000 per month combined. The GAO continues to monitor the enrollments.

The report also found vulnerabilities allowing for the misuse of Social Security numbers that likely resulted in unauthorized enrollment changes in 2023 and 2024.

Republicans on Wednesday cited the report in calling for an overhaul.

“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,” Jordan said in a statement.

“While Obamacare fraud is being confirmed by GAO, CMS, CBO and other outside reports, patients are suffering,” Smith said in a statement. “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.”

Senate votes on tap

Critics of the current tax-credit structure who argue it’s too easy for “phantom enrollees” to balloon the program’s costs are seeking to impose some sort of minimum premium payment for each beneficiary. They also want to reinstate income caps on eligibility that were removed in the 2021 pandemic-era subsidy expansion, and later extended through the end of this year.

The GAO report comes ahead of Senate votes next week on an emerging Democratic plan to renew the enhanced subsidies, which hasn’t yet been made public. “Stay tuned,” was all Senate Minority Leader Charles E. Schumer, D-N.Y., would say.

Senate Republicans were weighing whether to offer a “side-by-side” bill as an alternative to give their vulnerable members political cover, as neither bill is expected to pass.

House Republicans are also discussing their own preferred approach, as Democrats in that chamber circulate a discharge petition to force a vote on a three-year extension.

As of Wednesday, 214 Democrats had signed on; four Republicans would need to sign the discharge for it to be successful.

Top Democrats on Wednesday didn’t address the new GAO findings. But they didn’t appear deterred in their efforts to pass a clean extension.

“All we need are four Republicans to join us and we can prevent tens of millions of people from having dramatically increased health insurance costs,” House Minority Leader Hakeem Jeffries, D-N.Y., told reporters.

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(Paul M. Krawzak contributed to this report.)

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