GAO Identifies Fraud Gaps in ACA Marketplaces Allowing Fake Enrollment

The U.S. Government Accountability Office (GAO) released a report unveiling vulnerabilities in the Affordable Care Act (ACA) federal marketplaces that allowed fraudulent enrollment in 2024 and 2025. Through covert testing, the GAO created 20 fake identities and submitted applications for coverage. Nearly all fake accounts were approved, with 18 of the 20 fraudulent enrollees still covered as of September 2025. The total advance premium tax credits (APTC) disbursed for these fraudulent enrollees amounted to over $10,000 monthly for 2025 and approximately $2,350 monthly for 2024. The investigation highlighted gaps in CMS’s identity verification and fraud prevention controls, as fake applicants initially failed identity-proofing but were later approved due to submission of false documents. Applications were submitted both directly via HealthCare.gov and through insurance agents using Enhanced Direct Enrollment (EDE) systems, indicating systemwide vulnerabilities. GAO’s findings raise concerns about the integrity of ACA subsidized enrollment processes amid ongoing Congressional debates over extending enhanced subsidies. Republican lawmakers who requested the report point to these findings as examples of taxpayer funds potentially being misused. The report notes that fraudulent enrollee applications exploited loopholes, including use of invalid Social Security numbers, and special enrollment periods for low-income applicants. The GAO continues to monitor these enrollments to assess ongoing risks. This report underscores the challenges faced by the Centers for Medicare & Medicaid Services in preventing fraud, emphasizing the importance of robust identity-proofing and income verification within federal health insurance marketplaces. Moreover, the use of brokers with Enhanced Direct Enrollment technology in some fraudulent enrollments signals potential vulnerabilities in third-party channels reliant on CMS systems. Strengthening regulatory compliance and implementing advanced fraud detection methods remain critical for safeguarding ACA marketplace integrity. The GAO report serves as a focused call for CMS and policymakers to address systemic weaknesses in preventing improper ACA coverage approvals.