GAO Identifies Errors and Misuse in Obamacare COVID-19 Subsidies Amid Extension Debate

The Government Accountability Office (GAO) released findings identifying significant errors and instances of potential misuse within Obamacare's COVID-19-era enhanced premium tax credits (APTCs). The watchdog agency reported over 29,000 Social Security numbers (SSNs) in 2023 and nearly 68,000 in 2024 receiving multiple coverage plans within a single year, alongside instances where APTCs were applied to deceased individuals or accounts lacking valid identifying information. The GAO's investigation also included test cases with fictitious applicants, where 18 out of 20 fake accounts remained actively covered, accumulating over $10,000 in monthly APTC payments. Despite these issues, the GAO clarified that detected fraud affects less than 1% of all users within the Obamacare marketplace. Challenges in tying $21 billion of APTC expenses to valid SSNs indicate systemic difficulties in reconciling subsidy claims accurately. Complications arise partly due to the federal marketplace allowing multiple enrollments per SSN to mitigate identity theft and data entry errors, which adds complexity to tracking and preventing misuse. These vulnerabilities emerge as Congress debates extending the enhanced subsidies, originally enacted during the COVID-19 public health emergency, set to expire at the end of the year. Retaining the subsidies would cost approximately $30 billion annually, a point of contention where Republicans express concern over government spending and subsidy program inefficiencies, while Democrats emphasize the risk of sharp premium increases for over 90% of the 24 million enrollees if subsidies lapse. The GAO's findings underscore the need for improved oversight and verification within Obamacare's subsidy framework to ensure taxpayer funds are appropriately allocated and to support sustainable program integrity. The scheduled Senate vote on the three-year extension of these subsidies faces strong Republican opposition and is likely to fail, adding uncertainty to the future of marketplace affordability programs.