GAO Report Reveals Errors and Fraud Risks in Obamacare COVID-Era Subsidies

A recent report from the Government Accountability Office (GAO) highlights significant administrative challenges and potential errors within Obamacare's COVID-19-era enhanced premium tax credits (APTCs). The GAO found instances where these subsidies were applied to multiple coverage plans under the same Social Security Number (SSN), deceased individuals, and incomplete or fraudulent accounts. Specifically, over 29,000 SSNs in 2023 and nearly 68,000 in 2024 were linked to receiving APTCs for more than one plan within a single year. The GAO's investigation extended to creating fictitious applicants to test system vulnerabilities, revealing that 18 out of 20 fake accounts remained active with APTCs totaling over $10,000 monthly. Despite these findings, the GAO clarifies that detected fraud cases represent less than 1% of enrollees, and the data cannot be generalized across the entire Obamacare population. These findings emerge amid ongoing legislative debate about whether to extend the enhanced APTCs, which are set to expire at year-end. Democrats warn that without extension, over 90% of the 24 million enrollees may face significantly higher premiums. Conversely, some Republicans argue that allowing these subsidies to lapse could help reduce federal spending and address program inefficiencies highlighted by the GAO. The report also addresses difficulties in reconciling more than $21 billion of APTC expenses due to incomplete SSN data and notes that the federal marketplace permits multiple enrollments per SSN to accommodate identity theft and data errors. These operational flexibilities contribute to the complexity of fraud prevention and subsidy allocation. With healthcare costs anticipated to rise and bipartisan disagreement persisting, the Senate is poised to vote on extending the subsidies. However, strong Republican opposition suggests the measure is unlikely to pass, raising questions about future policy stability and affordability for Obamacare enrollees.