ACA marketplace allowed possible fraud through fake enrollees, GAO says

The Affordable Care Act marketplaces allowed fake enrollees to obtain coverage in 2024 and 2025, the General Accounting Office said in a report issued this week.

The report said the GAO analyzed the Centers for Medicare and Medicaid Services’ enrollee data as well as its fraud prevention and identity testing efforts. GAO found that there could be gaps in CMS’s process to prevent fraudulent enrollment.

GAO tested the ability of enrollees to obtain coverage through fraudulent means. The organization created fake identities for 20 enrollees and attempted to sign them up for federal marketplace coverage for 2024 and 2025. The report said coverage was approved for nearly all of the fake accounts. All four of the identities submitted in 2024 were still receiving coverage late into the year. As of September, 18 of the 20 fake identities submitted for 2025 were still receiving coverage.

The report was requested by Rep. Brett Guthrie, R-Ky., as well as House Judiciary Chairman Jim Jordan, R-Ohio, and House Ways and Means Chairman Jason Smith, R-Mo.

As the debate over extending enhanced ACA subsidies continues in Congress, Republicans contend that fraud in the program is wasting taxpayer money.

“This new report confirms what we already knew: under Obamacare, hardworking Americans saw their premiums skyrocket and their healthcare choices shrink, all while fraud benefited insurance companies,” Jordan said in a statement.

Failed identify-proofing yet still approved

GAO said the fake applicants in 2024 initially failed an identity-proofing step in the sign-up phase, but false identifying documents later submitted to CMS led to their approval. The combined total in tax credits paid on behalf of the 2024 fake enrollees was $2,350 per month.

For the 18 fake beneficiaries that remained actively covered as of September, tax credits totaled more than $10,000 per month combined. The GAO said it continues to monitor the enrollments.

GAO said its covert testing included applications submitted independently through HealthCare.gov, which is the federal marketplace’s website, and applications submitted with assistance from an insurance agent or broker.

For applications for plan year 2024, GAO’s covert tests included fictitious applicants who provided invalid (never issued) Social Security numbers. Additionally, GAO stated these fictitious applicants had income at a level eligible to obtain advance premium tax credits.

GAO tested enrollment controls

To test enrollment controls, GAO developed and submitted four fictitious applications to obtain insurance coverage with APTC through the federal Marketplace. The agency applied for coverage for these four applicants in October 2024. GAO submitted the applications outside of the open enrollment period, using a special enrollment period for low-income applicants. In two cases, GAO applied for coverage directly through HealthCare.gov. In the other two cases, GAO applied via telephone with assistance from an insurance broker. The brokers that assisted GAO used enhanced direct enrollment systems to submit the applications.

The federal Marketplace approved fully subsidized insurance coverage for all four of the fictitious applicants for November through December 2024, the GAO report said. The combined total amount of APTC paid to insurance companies for all four fictitious enrollees was about $2,350 per month.

GAO said the report suggests weaknesses in enrollment controls — such as identity proofing and income verification — in the federal Marketplace through both HealthCare.gov and EDE systems.

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