A startling new audit has revealed a deeply troubling vulnerability within the Affordable Care Act’s subsidy system. Senator John Thune recently presented findings from the Government Accountability Office (GAO) that expose a shocking level of fraud and systemic weakness, threatening billions in taxpayer dollars.
The GAO conducted a covert operation, creating entirely fictitious identities and attempting to enroll them in health plans through the federal marketplace. The results were staggering: a full 90% of these fabricated applicants were approved for taxpayer-funded subsidies, despite lacking any legitimate documentation.
This isn’t a minor glitch; it’s a widespread failure. The federal government is effectively sending money to cover health insurance for people who simply do not exist, a blatant waste of public funds and a betrayal of trust.
Investigators crafted 20 fake identities, deliberately using invalid Social Security numbers and inconsistent personal information. Yet, 18 of those applications sailed through the system, receiving and continuing to receive benefits well into September 2025. The cost? Over $10,000 per month in subsidies for each imaginary enrollee.
The GAO report paints a grim picture of systemic failures. One applicant received full approval without providing any proof of income or identity. Brokers, incentivized by commissions, bypassed security measures, pushing through applications flagged with invalid Social Security numbers.
These aren’t isolated incidents. The audit uncovered over 29,000 Social Security numbers used for more than a full year of coverage in 2023 – a clear sign of identity theft. One number was used for an astonishing 71 years’ worth of cumulative coverage across 125 separate policies.
Even more disturbingly, over 58,000 subsidized enrollees were matched to federal death records. More than 7,000 were enrolled *before* they had even passed away, and nearly 19,000 had their SSNs used with completely different names and birthdates, indicating sophisticated synthetic identity fraud.
The financial implications are immense. At least $94 million in taxpayer dollars were funneled to subsidies linked to deceased individuals. Furthermore, a staggering $21 billion in subsidies from 2023 showed no evidence of reconciliation with IRS tax filings, suggesting widespread noncompliance and potential fraud.
The audit also revealed rampant abuse by insurance brokers, many of whom are motivated by enrollment-based commissions. Investigators identified tens of thousands of applications with evidence of unauthorized changes, indicating brokers were manipulating plans or enrolling individuals without their consent to maximize their payouts.
Consumers filed over 183,000 complaints of being enrolled without permission and 90,000 complaints of unauthorized plan changes. While the Centers for Medicare & Medicaid Services (CMS) briefly suspended 850 brokers, they were later reinstated due to “procedural requirements,” raising serious questions about accountability.
The GAO’s findings aren’t new; similar weaknesses were documented nearly a decade ago. Yet, the core vulnerabilities remain unaddressed, allowing fraud and abuse to flourish year after year. This audit isn’t just a report; it’s a stark warning about a system in desperate need of reform.
The implications extend beyond financial waste. This erosion of trust undermines the very foundation of the Affordable Care Act and raises serious concerns about the responsible stewardship of taxpayer dollars.
