GAO Report Reveals Persistent Enrollment Fraud Challenges in ACA Marketplaces

A recent Government Accountability Office (GAO) report highlights ongoing challenges with enrollment fraud and unauthorized plan-switching within the Affordable Care Act (ACA) marketplace despite new anti-fraud regulations implemented in mid-2024. Florida resident cases reveal repeated unauthorized policy changes leading to significant financial burdens and access issues. The GAO investigation revealed that numerous complaints persist with over 275,000 unauthorized enrollment and plan-switching reports filed to the Centers for Medicare and Medicaid Services (CMS) in 2024. Efforts such as CMS’s introduction of three-way calls involving consumers, agents, and the marketplace have limited success due to weak verification protocols, including reliance on publicly available information and exempting new applicants from these calls. The GAO’s undercover probe involved submitting fake enrollment applications and identified approximately 1.5% of ACA applications potentially compromised by rogue agents, a smaller figure than some critics suggest. Congress remains divided on addressing ACA fraud amid debates over extending expanded premium tax subsidies, which some argue may incentivize fraudulent activity. Republican legislative proposals include enhanced eligibility verification, while Democratic measures seek criminal penalties for fraudulent brokers, though these have not yet advanced. CMS suspended around 850 brokers in 2024 connected to potential fraud but eventually reinstated all. While twenty states plus DC operate their own ACA marketplaces with stricter identity verification, the federal platform remains vulnerable due to minimal authentication standards. Insurance brokers and industry groups advocate for stronger verification measures like two-factor authentication to replace the underperforming three-way call system. The GAO report emphasizes systemic vulnerabilities in identity verification that have persisted since ACA’s inception over a decade ago, underscoring stagnant fraud prevention improvements despite increased enrollment and subsidy spending that amounted to $124 billion in 2024. The findings underscore the risk of enrollment fraud imposing financial and operational stress on consumers and insurers alike. Upcoming congressional hearings aim to address these concerns and explore reforms. The report encourages policymakers and regulators to bolster compliance mechanisms and fraud detection to protect ACA consumers and sustain marketplace integrity.