A shocking Government Accountability Office (GAO) report released this week proves what many have warned about for years: Obamacare’s subsidized exchange plans are a fraud magnet because eligibility and renewal controls are designed to load people on to programs, not kick them off.
At the request Congressional committee chairs investigating waste, fraud, and abuse in federal health programs, GAO investigators reported on an undercover plot to try to cheat the system themselves. They succeeded almost every time.
The undercover sting
- In 2023–2024, GAO submitted four completely fictitious applications using fake Social Security numbers and ineligible “applicants.” → All four were approved and began receiving taxpayer-funded Advance Premium Tax Credits (APTC).
- For the 2025 plan year, GAO submitted 20 additional fake applications (again using fabricated SSNs and ineligible individuals). → 22 of the 24 were approved and paid → Only one was rejected → One was abandoned when the broker ghosted the undercover agent
When CMS flagged inconsistencies and requested verifying documents (income, citizenship, etc.), GAO either submitted nothing at all or sent obviously counterfeit documents. Every single application was approved anyway.
Phantom and dead enrollees The GAO also uncovered:
- More than 7,000 deceased individuals still receiving Obamacare subsidies in 2023
- At least $94 million in APTC payments made that year to policies linked to dead people
- Widespread broker abuse: From Jan–Aug 2024, 90,000 consumers complained that their policies were switched without consent
- One Social Security number used to generate 125 separate policies—racking up more than 71 years of subsidized coverage
This mirrors the Medicaid “phantom enrollee” scandal exposed by American Experiment in 2024, when we found up to one in five Medicaid recipients were ghosts who didn’t even know they were enrolled—usually because they already had other coverage.
Who wins? Insurance companies collect billions in premiums for people who never file claims, and unscrupulous brokers pocket enrollment and “switch” fees. Taxpayers lose.
Fifteen years after passage, Obamacare’s eligibility controls remain so weak that undercover federal agents can steal subsidies with fake SSNs and forged documents—and almost always get away with it.
More to come:
For More Information:
[1] U.S. Government Accountability Office, “Affordable Care Act: CMS Needs to Strengthen Controls to Better Detect and Deter Fraud in the Marketplaces” (GAO-25-107357), December 2025. https://www.gao.gov/products/gao-25-107357
[2] Center for the American Experiment, “Phantom Enrollees: How Minnesota and Other States Are Paying Billions for Medicaid Recipients Who Don’t Know They’re Covered”, October 2024. https://www.americanexperiment.org/reports/what-the-medicaid-undercount-reveals-about-the-medicaid-unwinding