GAO Report Reveals Extensive Fraud in ACA Marketplace Premium Subsidies

A recent Government Accountability Office (GAO) report has revealed significant fraud, waste, and abuse within the Affordable Care Act (ACA) marketplace premium subsidy system. The analysis found extensive misuse of Social Security numbers (SSNs), including a single SSN appearing in over 125 insurance policies, and over $21 billion in improper advance premium tax credit (APTC) reconciliations for the 2023 plan year. The report further highlighted that all fictitious identities created by GAO investigators received subsidized ACA coverage, with most continuing to receive subsidies into 2025, demonstrating systemic verification failures. Additionally, the GAO discovered that insurance companies have collected ACA subsidies for approximately 58,000 deceased individuals, amounting to roughly $94 million. Many of these individuals were deceased before coverage even began. Consumer complaints have also exposed fraudulent enrollments, with about 275,000 cases reported over eight months where individuals were enrolled or had their plans altered without consent. This suggests misuse by brokers or agents in the federal Marketplace system. Research from the Paragon Health Institute aligns with the GAO findings, indicating that a substantial portion of ACA enrollees have no recorded medical claims, pointing to phantom enrollments. The enhanced ACA premium subsidies, including $0 premium plans, have reportedly incentivized widespread improper enrollments, with an estimated 6.4 million Americans enrolled improperly in 2025. This improper enrollment is projected to cost taxpayers up to $27 billion this year. The GAO report underscores a lack of effective controls in the federal Marketplace to prevent fraud and misuse of taxpayer funds. Given the expiration of these ACA subsidies at the end of the year, this report raises critical concerns for policymakers considering extension or expansion of the program. The findings highlight the need for robust verification and reconciliation processes within ACA marketplaces to ensure proper use of subsidies and protect public funds.