Federal investigators have uncovered extensive fraud in Obamacare, revealing a pattern of fake identities, misused Social Security numbers and unauthorized plan changes that cost taxpayers billions.
A new report found subsidies were issued for deceased individuals, applicants who never provided documentation and even fictitious enrollees created by government investigators.
Senate Finance Committee Chairman Mike Crapo (R-ID) said the problem stems from structural weaknesses worsened by temporary COVID-era subsidy increases.
“The GAO’s findings further illustrate the brokenness of Obamacare,” Crapo said, warning that inflated credits have “exacerbated structural failures, causing fraud to explode and leaving taxpayers to subsidize criminals and shady insurance brokers.”
To test the system, the Government Accountability Office (GAO) created fake identities and attempted to enroll them in subsidized coverage.
Every fraudulent applicant in 2024 was approved, and 18 of 20 remained covered in 2025.
CMS paid more than $2,350 per month in premium tax credits for the fictitious 2024 enrollees alone, even though many applicants never provided documentation to verify identity, citizenship or income.
Fraudulent coverage was frequently approved even when applicants submitted falsified proof of income or Social Security numbers. In some cases, coverage was granted when no documents were submitted at all.
Investigators found 66,000 Social Security numbers were used for more than one insurance coverage year in 2024, including one SSN attached to 125 separate policies in 2023.
Another vulnerability involved subsidies paid for individuals who were no longer alive.
Roughly $94 million was issued on behalf of enrollees listed as deceased, and federal records later matched at least 58,000 Social Security numbers receiving subsidies to death data.
At least 7,000 of those individuals died before their coverage even began, according to Just the News.
Identity misuse was only one aspect of the broader problem.
Nearly 160,000 applications were likely altered by brokers without the enrollee’s permission in 2024, while CMS received more than 270,000 complaints from Americans who said they were enrolled or switched into plans against their will.
These unauthorized changes not only disrupted access to medications but also allowed brokers to collect improper fees.
The GAO also warned that large amounts of taxpayer funds may never be recovered.
Investigators could not find evidence of tax reconciliation for more than $21 billion in premium tax credits issued in 2023, a process required to ensure subsidies match actual income.
Although some enrollees may be eligible, unreconciled credits create a significant risk of overpayment.
Republicans say the report confirms that the program has failed to protect taxpayers and consumers.
House Ways and Means Chairman Jason Smith called the findings “the smoking gun” proving billions in improper payments.
“Patients are suffering,” Smith said. “They face higher health care costs and denied claims or delayed care when their providers struggle to verify which insurance is valid due to these fraud schemes.”
The Affordable Care Act program issued approximately $124 billion in premium tax credits for 19.5 million enrollees in 2024.
Congressional and outside estimates suggest that millions may be enrolled improperly, costing taxpayers up to $27 billion annually.
GAO found that fraud risk assessments have not been updated since 2018, even as the program has changed.
Investigators said those weaknesses “appear to hinder CMS’s ability to effectively and proactively manage fraud risks,” urging federal officials to implement an antifraud strategy before additional taxpayer dollars are wasted.
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