Op-Ed: A prescription for fraud? GAO finds serious abuses in Obamacare exchanges

Remember when Americans were told that the Affordable Care Act (also known as Obamacare) would lower health care costs and that if you liked your doctor, you could keep her? How things have changed over the past 15 years.

Health care costs continue to rise faster than inflation and millions of Americans have discovered that their health insurance plans don’t cover their chosen physician.

As the saying goes, to add insult to injury, the Government Accountability Office (GAO) recently released a severe indictment of the federal Obamacare insurance exchanges that revealed troubling fraud in the program. The GAO enrolled 24 fake applicants in the federal exchange, with 18 being approved. The annual subsidy that each “applicant” received was $6,700 for a total cost to taxpayers of a little over $120,000.

That’s not a huge amount, but the GAO investigation went deeper. It found that in 2023, there were 29,000 duplicate Social Security numbers, and in 2024, there were 68,000 duplicates listed in the federal exchange. In other words, in a two-year period, there were nearly 100,000 fake applicants who received taxpayer subsidies.

Also, the GAO discovered that when insurance brokers submitted incorrect or false Social Security numbers for applicants, the federal Center for Medicare and Medicaid Services (CMS), which runs the federal exchange, accepted the application anyway. In a real sense, the federal government has been complicit in the fraud.

The financial impact gets worse. In 2023 alone, the GAO found that there was no income verification on $21 billion in subsidies. Consequently, it is unknown how many applicants understated their annual income to receive higher subsidies. Looking at Census Bureau data, The Paragon Health Institute estimates that 6.4 million people were improperly enrolled in subsidized exchange plans at a cost of $27 billion.

With this lack of oversight or outright fraud, it would be beneficial to know how large the entire Obamacare exchange program is today. Data from 2024 reveal that the total cost of the subsidies in the ACA exchanges was $125 billion. In other words, over 20 percent of the cost to taxpayers may have been for ineligible expenses on the exchanges in 2024.

The GAO report is timely and uncovers substantial abuse and fraud in a major government program. It should also serve as a warning and demonstrate the need for meaningful oversight in other government taxpayer-funded programs.

Dr. Roger Stark is a visiting fellow with Mountain States Policy Center, an independent research organization based in Idaho, Montana, Eastern Washington and Wyoming. Online at mountainstatespolicy.org. A retired surgeon, Dr. Stark has authored three books, including “Healthcare Policy Simplified: Understanding a Complex Issue” and “The Patient-Centered Solution: Our Health Care Crisis, How It Happened, and How We Can Fix It.”