GAO Report Highlights Persistent ACA Enrollment Fraud Despite New Federal Rules

A recent Government Accountability Office (GAO) report reveals ongoing challenges with unauthorized changes and enrollment fraud within the Affordable Care Act (ACA) marketplace, despite new federal rules introduced in mid-2024 to prevent such issues. The report identifies that over 275,000 complaints of unauthorized enrollments and plan switching were filed with the Centers for Medicare & Medicaid Services (CMS) in 2024. These unauthorized changes, often executed by rogue insurance brokers, can cause significant disruption for consumers, including unexpected premium bills and compromised access to healthcare providers. The GAO’s investigative efforts included submitting fictitious applications, many of which were approved despite forged documents, highlighting persistent vulnerabilities in identity verification processes. CMS implemented a three-way call verification system involving the consumer, marketplace, and agent for certain plan changes starting in July 2024. However, loopholes in these verification measures, such as reliance on publicly available personal information, have allowed fraudulent activity to continue. Unlike the federal marketplace, state-run ACA exchanges report far fewer instances of unauthorized changes due to stronger authentication protocols and separate website infrastructures. The GAO report calls out that CMS has not updated its fraud risk assessment since 2018, even as ACA enrollments have expanded considerably, underscoring systemic weaknesses in anti-fraud efforts. Congressional debate continues regarding the extension of enhanced tax subsidies for ACA enrollees, with some legislators linking subsidy programs to fraud risks. Legislative proposals differ, with GOP initiatives focusing on increased eligibility verification while Democrats have introduced bills to penalize brokers who submit false enrollment data, though these measures have yet to advance substantially. Industry stakeholders and oversight bodies recommend adopting more robust identity verification methods like two-factor authentication, modeled after banking standards, to mitigate fraud risks. Overall, the report highlights a critical need for strengthened regulatory and operational safeguards within the ACA marketplace to protect consumers and reduce fiscal waste from improper subsidy payments.