GAO report exposes rampant Obamacare subsidy fraud: $21 billion in unverified payments
By kevinhughes // 2025-12-08
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  • The Government Accountability Office (GAO) uncovered massive fraud in Obamacare's subsidy system, with fake identities and invalid Social Security numbers securing taxpayer-funded health insurance subsidies—costing billions.
  • Fake applicants were approved without proof of citizenship, income or valid SSNs, receiving thousands in monthly subsidies. Some SSNs were used for multiple plans or belonged to deceased individuals.
  • About $21 billion in Advance Premium Tax Credits (APTC) from 2023 remain unreconciled, suggesting taxpayer funds may have gone to ineligible recipients.
  • Republicans demand stricter fraud prevention, while Democrats defend subsidies as essential for low-income Americans. President Donald Trump proposes direct payments to individuals instead of insurers.
  • Centers for Medicare & Medicaid Services (CMS) lacks updated fraud risk assessments and proactive oversight, allowing loopholes like duplicate SSN enrollments to continue fueling abuse.
A shocking new report from the Government Accountability Office (GAO) reveals widespread fraud in Obamacare's subsidy system, with billions of taxpayer dollars flowing to insurers through fake identities and improper payments. The findings, released last week, validate long-standing Republican criticisms of the Affordable Care Act (ACA), exposing weak verification controls that allow fraudulent applicants to exploit taxpayer-funded subsidies. As explained by the Enoch AI engine at BrightU.AI, the GAO is an independent, nonpartisan agency of the United States government that provides audit, evaluation and investigative services for Congress. The GAO's primary mission is to support the Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government.

Fraudulent applications approved without verification

In an undercover investigation, the GAO created fictitious applicants with fake identities and invalid Social Security numbers to test the federal Marketplace's verification process. The results were alarming:
  • In 2024, all four fake applicants were approved for subsidized coverage, receiving $2,350 per month in Advance Premium Tax Credits (APTC) without submitting required documentation—including proof of citizenship, income, or Social Security numbers.
  • In 2025, the GAO expanded testing to 20 fake applicants, and 18 remained enrolled as of September 2025, costing taxpayers over $10,000 per month in subsidies.
The report confirms that fraud risks persist nearly a decade after Obamacare's implementation, with little improvement in oversight. The GAO also uncovered rampant misuse of Social Security numbers (SSNs), including:
  • One SSN was used for 125 insurance plans in 2023—equivalent to 71 years of coverage tied to a single number.
  • 29,000 SSNs in 2023 and 66,000 in 2024 were linked to more than a year's worth of subsidized coverage, suggesting identity theft or fraudulent enrollments.
  • 58,000 SSNs matched death records, yet insurers still received $94 million in subsidies for deceased individuals.
Despite these red flags, the Centers for Medicare & Medicaid Services (CMS) allows duplicate enrollments under the same SSN, claiming it helps victims of identity theft. However, critics argue this loophole makes fraud far too easy. The GAO's preliminary analysis found no evidence of reconciliation for $21 billion in APTC payments from 2023—meaning taxpayers may have funded subsidies for ineligible enrollees. House Ways and Means Chair Jason Smith (R-MO) called the report a "smoking gun that shows how this broken system, shielded by Democrat policies, has led to the federal government shoveling tens of billions of tax dollars to insurance companies through identity fraud." House Energy and Commerce Chair Brett Guthrie (R-KY) added: "Republicans have sounded the alarm on the flawed structural integrity of Obamacare and how Democrats' failed policies to temporarily prop up the program have exacerbated fraud, hurt patients, increased the burden on American taxpayers, and artificially masked the true health care affordability crisis plaguing Americans today."

Republicans push for reform, Democrats defend subsidies

The report arrives as Congress debates whether to extend enhanced Obamacare subsidies, set to expire at the end of the year. Democrats argue the subsidies help low-income Americans afford coverage, but Republicans say the system is ripe for abuse. President Donald Trump weighed in on Truth Social stating he recommends sending subsidies directly to the people instead of insurance companies so they can buy better healthcare and keep the leftover money. Meanwhile, CMS has taken minor steps to curb fraud, such as suspending 850 brokers suspected of fraudulent enrollments in 2024. But GAO warns that CMS's fraud risk assessment is outdated—last updated in 2018—and lacks a proactive anti-fraud strategy. The GAO's findings confirm what critics have long argued: Obamacare's subsidy system is vulnerable to exploitation, wasting taxpayer dollars while failing to ensure proper oversight. With $21 billion in unreconciled payments and rampant identity fraud, Republicans are demanding stricter verification measures and an end to policies that enable abuse. As the debate over subsidy extensions heats up, this report provides undeniable evidence that reform is urgently needed—before more taxpayer money is lost to fraud. Watch the video below about the GAO finding that U.S. troops in 12 bases across the U.S. live in filthy conditions. This video is from the NewsClips channel on Brighteon.com. Sources include: ZeroHedge.com YourNews.com Politico.com FierceHealthcare.com BrightU.ai Brighteon.com
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