Obamacare Subsidy Fraud Audit Reveals Vulnerabilities

A federal audit released this week by the Government Accountability Office has found serious and ongoing fraud vulnerabilities in the federal Obamacare subsidy system, including the approval of benefits using fake identities, invalid Social Security numbers and unauthorized broker activity.

The report reviewed the Advance Premium Tax Credit program which distributes federal subsidies to help individuals purchase insurance on the HealthCare.gov marketplace. In 2024 alone the subsidy system paid out nearly $124 billion.

Fake Identities Approved for Coverage

As part of its investigation the GAO created 20 fictitious applicants and attempted to enroll them for subsidized coverage. Four of four fake applicants submitted in 2024 were approved. In 2025, 18 of 20 test accounts remained active and continued receiving federal subsidies.

The agency confirmed the applications used fake documents and invalid Social Security numbers and were still approved by the system.

The audit also found that thousands of subsidies were issued using Social Security numbers that belonged to deceased individuals. In one year alone nearly 58,000 such numbers were linked to subsidized policies with approximately $94 million paid out to households tied to those records.

GAO also identified tens of thousands of cases where the same Social Security number was used across multiple years and multiple insurance policies.

Unauthorized Broker Activity

The report found widespread unauthorized changes to insurance plans by brokers. More than 160,000 likely unauthorized changes were identified in 2024. Federal officials confirmed receiving 90,000 consumer complaints related to plan switching and improper enrollments.

Hundreds of brokers were temporarily suspended but later reinstated.

Oversight Gaps Remain

GAO reported that the Centers for Medicare and Medicaid Services last completed a full fraud risk assessment in 2018 despite the program more than doubling in size since then. The agency concluded that federal oversight has not kept pace with the growth of the subsidy system.

Further corrective action has been recommended.

Article written by SHR Media News Staff