House Committee Targets Health Insurers in Fraud Investigation
The U.S. House Judiciary Committee has taken significant action by issuing subpoenas to eight leading health insurance companies. This move is part of an investigation into fraud prevention practices within the industry, following a revealing report from the Government Accountability Office (GAO). The GAO highlighted serious discrepancies, such as $21 billion in unreconciled tax credits and $27 billion in improper annual payments across the Affordable Care Act marketplace.
The GAO's findings showed that 32% of advance premium tax credits in 2023 were unreconciled, totaling $21 billion for individuals with identifiable Social Security numbers. The lack of reconciliation poses significant challenges to regulatory compliance requirements, as it hinders the verification and accountability of subsidy eligibility.
Additional context from the GAO report notes that about 17% of the $124 billion in premium tax credits disbursed to 19.5 million participants in 2024 were similarly unreconciled. This has resulted in escalating federal subsidy expenses, projected to reach $138 billion by 2025, according to the Committee for a Responsible Federal Budget. Subpoenaed insurers include Blue Shield of California, Centene Corp., and CVS Health Corp., among others.
The GAO also identified systemic vulnerabilities beyond unreconciled tax credits, such as instances where 58,000 Social Security numbers tied to deceased individuals received subsidies, resulting in a $94 million payout error. A notable case involved a single Social Security number securing over 125 policies, indicating risk management failures and suggesting nearly 71 years of coverage in 2023.
According to the report, GAO's covert tests exposed significant underwriting loopholes, with fraudulent applications being approved as late as 2024 and most remaining active into 2025. These subsidies, linked to fictitious identities, resulted in payouts exceeding $12,300 monthly, underscoring provider and payer vulnerability to fraud.
Unreconciled premium tax credits often arise when recipients fail to file IRS Form 8962, crucial for aligning projected and actual income. GuideWell, one of the subpoenaed carriers, affirmed its commitment to compliance, with a spokesperson stating their dedication to building a health care system focused on trust and transparency.
In response to these findings, the Trump administration proposed fraud protection measures within the Marketplace Integrity and Affordability rules in June 2025. However, these measures faced setbacks due to violations of the Administrative Procedures Act, along with judicial blocks that impacted the enrollment and verification process enhancements.