GAO Report Highlights Persistent ACA Enrollment Fraud Risk and Verification Gaps

In 2024, unauthorized changes to Affordable Care Act (ACA) insurance plans remain a significant issue despite new federal rules implemented mid-year aimed at preventing such occurrences. Florida resident Keith Jones is among many facing repeated unauthorized plan alterations, leading to financial and healthcare access challenges. Insurance professionals, including South Florida agent Jason Fine, report helping numerous clients affected by these unauthorized switches. A Government Accountability Office (GAO) report released in December 2024 highlights longstanding gaps in ACA enrollment fraud prevention, noting that previous warnings over the past decade under multiple administrations have not resulted in sufficient improvements. The Centers for Medicare & Medicaid Services (CMS) received over 275,000 complaints related to unauthorized enrollments or plan changes in 2024, underscoring the persistence of the problem. The GAO's investigative methods included submitting fictitious ACA enrollments, finding that most fake applications were approved, with subsidies totaling an estimated $124 billion disbursed for nearly 20 million enrollees in 2024. While the GAO identified approximately 160,000 cases with potential fraud indicators – about 1.5% of ACA applications – this figure is below some broader estimations of fraudulent enrollments proposed by critics. CMS took action by suspending roughly 850 brokers suspected of involvement in unauthorized enrollments, although all were ultimately reinstated. One federal measure to combat this issue has been the introduction of mandatory three-way calls involving the consumer, the marketplace, and their agent for certain plan modifications. However, the GAO notes this system includes verification loopholes, such as relying on publicly available information which can be easily impersonated. In contrast, state-run ACA marketplaces in 20 states and D.C. employ stronger identity verification protocols, resulting in fewer issues with unauthorized changes. Industry representatives, including broker lobby groups, have advocated for the adoption of two-factor authentication within the federal marketplace to enhance identity proofing, similar to security standards in banking. Congressional debate continues around ACA subsidy extensions and fraud prevention legislation. Proposed criminal penalties for brokers knowingly submitting false enrollment information have not advanced in the Republican-led legislative environment, despite Democratic sponsorship. The GAO investigation was initiated by a bipartisan group of House committees and represents an ongoing effort to evaluate and improve federal ACA fraud safeguards. It reveals persistent vulnerabilities in identity verification and enrollment management processes, contributing to risks for consumers and the sustainability of the ACA marketplace. CMS states that combating waste, fraud, and abuse remains a priority and that allegations are addressed promptly when identified. Meanwhile, the GAO report recommends enhanced fraud risk assessments and improved consumer identity protections to better secure ACA enrollment integrity in future years.