GAO Report Highlights ACA Subsidy Fraud Concerns and Solutions
In December, the Government Accountability Office (GAO) released a preliminary report highlighting potential discrepancies in the administration of the Affordable Care Act’s (ACA) advance premium tax credits (APTC).
The investigation used fabricated applicants to examine the Centers for Medicare & Medicaid Services' (CMS) handling of subsidy distributions. In 2024, four fictitious profiles received payments totaling approximately $2,350 per month, despite incomplete documentation like missing citizenship proof or Social Security numbers (SSNs). In 2025, this tactic expanded to 20 artificial profiles, with 18 still obtaining subsidies that collectively surpassed $10,000 monthly.
The GAO discovered the use of duplicate SSNs for multiple coverage years, impacting 29,000 numbers in 2023 and 66,000 in 2024. The report also noted unauthorized changes to a significant number of coverage applications—around 30,000 in 2023 and 160,000 in 2024. These actions could potentially disrupt consumer access to essential healthcare services, raising concerns about regulatory compliance requirements.
While some congressional representatives emphasized these findings as indicators of inefficiencies, industry experts argue that such fraudulent cases are a minor portion of overall transactions. Affected applications made up only 0.4% and 1.5% of all submissions for 2023 and 2024, respectively. Similarly, duplicate SSN cases constituted less than 1% of all subsidized IDs processed, indicating a need for further investigation to uncover the origins of these anomalies within regulatory frameworks.
The healthcare fraud challenges identified by the GAO have persisted across multiple presidential administrations, pointing to systemic issues in verification processes. In response, a congressional member highlighted corrective actions by CMS, such as suspending agents and brokers suspected of misconduct, showing industry-driven commitment to regulatory compliance.
Enhancing ACA Program Integrity
Despite the limited scale of detected fraud, the GAO's findings underscore the need for enhanced oversight measures to strengthen the ACA subsidy program's integrity. Industry responses might include implementing more rigorous identity verification systems and adhering to regulatory compliance. The National Health Care Anti-Fraud Association estimates that fraud constitutes a small yet significant part of healthcare expenditures annually. As healthcare spending is expected to surpass $5 trillion by 2025, stakeholders must balance ACA subsidy expansion with effective fraud prevention strategies to maintain fiscal health and program credibility.
Insurance professionals are urged to remain vigilant, prioritize consumer data security, and support endeavors aimed at optimizing the regulatory environment governing healthcare subsidies. For more detailed guidance on fraud prevention, individuals and organizations should consult official communications from government sources or reputable industry entities within the risk management and payer landscape.