Concerns Over Fraudulent ACA Subsidies: Senators Urge DOJ Action
A group of 14 Republican senators has formally addressed concerns regarding fraudulent payments associated with subsidies in the Affordable Care Act (ACA) marketplace. They are urging the Department of Justice (DOJ) to take corrective action. Led by Senator John Cornyn of Texas, the senators sent a letter to Assistant Attorney General Brett A. Shumate of the DOJ's Civil Division, expressing alarm over significant financial discrepancies related to ACA subsidies.
The senators highlighted evidence of system abuses, such as subsidies being allocated based on false identities, invalid Social Security numbers, and to policies in the names of deceased individuals. They emphasized the government's responsibility to recover these improperly disbursed funds, ensuring that taxpayer dollars are responsibly managed and regulatory compliance requirements are met.
A recent Government Accountability Office (GAO) report corroborates these concerns, noting that several Social Security numbers receiving subsidies in 2023 matched death records. This led to substantial sums—$94 million in total—being improperly directed to insurance carriers for deceased recipients. Furthermore, the audit unveiled a lack of reconciliation procedures for over $21 billion in subsidies from 2023, raising significant regulatory and compliance issues.
Continued scrutiny during the first eight months of 2024 revealed approximately 275,000 complaints regarding unauthorized enrollments or changes to existing health plans, indicating potential vulnerabilities within the payer system. These incidents require immediate attention to prevent further misuse and financial loss within the insurance industry.
Recent Legal Actions Shed Light on Fraudulent Activities
Recent legal actions have resulted in successful convictions of individuals involved in fraudulent activities. In one noteworthy case, a Florida executive admitted to falsifying ACA plan applications, leading to over $133.9 million in unwarranted federal payments. Similarly, in 2025, convictions were secured against a brokerage firm president and a marketing executive tied to a $233 million fraudulent scheme, with at least $180 million in inappropriate subsidies.
The senators are pressing the DOJ to clarify its strategies for addressing and recovering funds connected to these fraudulent activities. They are querying the pursuit of cases under the False Claims Act or similar legal frameworks and seeking detailed updates on any ongoing civil investigations into fraudulent marketplace activities since April 2021.
The Department of Justice has yet to provide a public response regarding the senators' inquiries, leaving industry stakeholders eager for updates on regulatory and risk management strategies.