GAO ‘Smoking Gun’ Report Exposes Massive Identity Fraud in Health Subsidies

Paul Riverbank, 12/4/2025Republican lawmakers cite a GAO report showing widespread subsidy fraud in Obamacare marketplaces, fueling calls for stricter checks and health system reform as billions in taxpayer funds and the future of health care policy come under renewed scrutiny in Congress.

The backdrop: A recent examination by the Government Accountability Office, Congress’s chief watchdog, has revealed some glaring vulnerabilities. Investigators crafted a handful of fake identities — not just one or two, but, this year, a full twenty—sending them through the online insurance exchanges to see if the system would hold up. It didn’t.

Remarkably, every one of the GAO’s fabricated people managed to secure a tax-payer funded subsidy in 2024. No verification of Social Security number, income certification, or even proof of citizenship tripped them up. The result? Tens of thousands in premium credits issued monthly, with not a single inquiry holding the bogus applicants back. And that’s before you consider the history: previous GAO forays found similar loopholes, but this year’s expansion of the sting lays the problem bare.

Representative Jason Smith, a Missourian and chairman of the House Ways and Means Committee, minced no words: “This is the smoking gun,” he declared. He laid the blame at Democratic feet, calling the system “broken” and “shielded” by partisan policies, and warning that it has let “tens of billions of taxpayer dollars” slip through the cracks.

Other Republican leaders quickly joined in chorus. Rep. Brett Guthrie, who heads a subcommittee on health, argued that the findings only confirmed what critics have warned for years: that the ACA’s design, and the patchwork of policies meant to shore it up, have inadvertently opened the gates for abuse and complicated the lives of average Americans.

If the numbers on phony applicants weren’t enough, the GAO found over 58,000 insurance accounts registered last year using the Social Security numbers of people long deceased. In one standout case, a single Social Security number unlocked coverage for more than seven decades, tallying up over 125 separate policies. Such facts, Republicans say, point to a system in immediate need of patching, not more promises.

Defenders of the present setup might point to rules meant to help victims of identity theft. The Centers for Medicare and Medicaid Services will reassign Social Security numbers when a legitimate need arises, they argue. But in the GAO analysis, this good intention seems to have only broadened the door for bad actors. Over the past year, those stopgaps allowed roughly 66,000 numbers to circulate for multiple policies well past the threshold of ordinary use.

The original selling points of Obamacare have come under sharper scrutiny in recent years, and this report has only sharpened the knives. Representative Jim Jordan, never shy about his opposition to the ACA, cited broken promises on premiums and doctor choice, calling the latest abuses "confirmation" that costs have soared while choices have shrunk.

Democrats, for their part, have fought tooth and nail to preserve and expand premium credits since the COVID-19 emergency, arguing they keep health insurance within reach for ordinary Americans. But those extra subsidies are set to expire after 2025, unless Congress intervenes. And with a government shutdown once again looming, the stage is set for another health care showdown.

Under the Republican proposal—branded the “Big Beautiful Bill,” in an echo of former President Trump's rhetorical style—lawmakers would clamp down with eligibility verification and close off what they term “anytime” enrollment. Their goal, they say, is simple: make sure the money is going to actual, eligible people, not lost to the ether.

Of course, this isn’t just a bureaucratic exercise. Health policy changes ripple into the lives of millions, and there are real financial consequences—sometimes for those least able to absorb them. Beyond the ACA, the Biden administration’s recent rules on senior pharmacy care have drawn their own warnings, with some advocates painting a dire picture of potential pharmacy closures and ballooning costs for Medicare unless Congress commits hundreds of millions to stave off the fallout.

As ever, neither party claims to want waste, higher costs, or fewer choices for Americans. But the arithmetic from the GAO’s testing—and the subsequent political uproar—puts unusual pressure on Congress to act. With enrollment numbers in flux and a midterm election campaign starting to rumble, both sides appear poised for a fresh round of health care policy brinkmanship. Whether Congress will resolve these loopholes—or merely add them to the ever-growing jumble of Washington’s unresolved issues—remains a question very much alive on Capitol Hill.

In Washington, the debate over federal health care policy seldom runs quiet, but it’s returned to the boil this week, with fresh claims of widespread fraud in the Affordable Care Act’s insurance marketplaces setting the stage. Republican lawmakers are sounding the alarm — and they say they have a new report to back it up.The backdrop: A recent examination by the Government Accountability Office, Congress’s chief watchdog, has revealed some glaring vulnerabilities. Investigators crafted a handful of fake identities — not just one or two, but, this year, a full twenty—sending them through the online insurance exchanges to see if the system would hold up. It didn’t.Remarkably, every one of the GAO’s fabricated people managed to secure a tax-payer funded subsidy in 2024. No verification of Social Security number, income certification, or even proof of citizenship tripped them up. The result? Tens of thousands in premium credits issued monthly, with not a single inquiry holding the bogus applicants back. And that’s before you consider the history: previous GAO forays found similar loopholes, but this year’s expansion of the sting lays the problem bare.Representative Jason Smith, a Missourian and chairman of the House Ways and Means Committee, minced no words: “This is the smoking gun,” he declared. He laid the blame at Democratic feet, calling the system “broken” and “shielded” by partisan policies, and warning that it has let “tens of billions of taxpayer dollars” slip through the cracks.Other Republican leaders quickly joined in chorus. Rep. Brett Guthrie, who heads a subcommittee on health, argued that the findings only confirmed what critics have warned for years: that the ACA’s design, and the patchwork of policies meant to shore it up, have inadvertently opened the gates for abuse and complicated the lives of average Americans.If the numbers on phony applicants weren’t enough, the GAO found over 58,000 insurance accounts registered last year using the Social Security numbers of people long deceased. In one standout case, a single Social Security number unlocked coverage for more than seven decades, tallying up over 125 separate policies. Such facts, Republicans say, point to a system in immediate need of patching, not more promises.Defenders of the present setup might point to rules meant to help victims of identity theft. The Centers for Medicare and Medicaid Services will reassign Social Security numbers when a legitimate need arises, they argue. But in the GAO analysis, this good intention seems to have only broadened the door for bad actors. Over the past year, those stopgaps allowed roughly 66,000 numbers to circulate for multiple policies well past the threshold of ordinary use.The original selling points of Obamacare have come under sharper scrutiny in recent years, and this report has only sharpened the knives. Representative Jim Jordan, never shy about his opposition to the ACA, cited broken promises on premiums and doctor choice, calling the latest abuses "confirmation" that costs have soared while choices have shrunk.Democrats, for their part, have fought tooth and nail to preserve and expand premium credits since the COVID-19 emergency, arguing they keep health insurance within reach for ordinary Americans. But those extra subsidies are set to expire after 2025, unless Congress intervenes. And with a government shutdown once again looming, the stage is set for another health care showdown.Under the Republican proposal—branded the “Big Beautiful Bill,” in an echo of former President Trump's rhetorical style—lawmakers would clamp down with eligibility verification and close off what they term “anytime” enrollment. Their goal, they say, is simple: make sure the money is going to actual, eligible people, not lost to the ether.Of course, this isn’t just a bureaucratic exercise. Health policy changes ripple into the lives of millions, and there are real financial consequences—sometimes for those least able to absorb them. Beyond the ACA, the Biden administration’s recent rules on senior pharmacy care have drawn their own warnings, with some advocates painting a dire picture of potential pharmacy closures and ballooning costs for Medicare unless Congress commits hundreds of millions to stave off the fallout.As ever, neither party claims to want waste, higher costs, or fewer choices for Americans. But the arithmetic from the GAO’s testing—and the subsequent political uproar—puts unusual pressure on Congress to act. With enrollment numbers in flux and a midterm election campaign starting to rumble, both sides appear poised for a fresh round of health care policy brinkmanship. Whether Congress will resolve these loopholes—or merely add them to the ever-growing jumble of Washington’s unresolved issues—remains a question very much alive on Capitol Hill.