GAO investigators found major risks of fraud in ACA Subsidies. A plan led by Josh Gottheimer and Jen Kiggans offers a path to reduce it. 

Enhanced Affordable Care Act (ACA) tax credits are set to expire at the end of 2025. Unless Congress steps in, health insurance costs will soar for millions of Americans who receive the subsidies.  

A bipartisan group of 38 House members, led by Reps. Josh Gottheimer and Jen Kiggans, is trying to prevent that. 

Their proposal, called CommonGround for Affordable Health Care Act, lays out a roadmap that both parties could support – one that temporarily extends the subsidies while also tightening the screws on fraud and abuse in the system. 

A well-timed report from the Government Accountability Office (GAO) makes clear why fraud protection must be included in any serious proposal. Fraud does more than waste money: it erodes trust in a program that millions of Americans rely on for affordable healthcare.  

Here’s what the GAO found.  

Secret Shoppers 

The GAO, a nonpartisan government watchdog that works for Congress, sent 20 undercover “secret shoppers” to test the ACA in 2024 and 2025. The investigators applied for subsidized insurance with fake IDs, invalid Social Security numbers, or no proof of citizenship.  

They should have been caught and rejected by the system immediately.  

Instead, 18 of the 20 false applications were approved and continue to receive taxpayer-funded health insurance to this day. All together, these 18 fictitious patients receive $120,000 in government subsidies per year.  

Sadly, this wasn’t a surprise. The GAO has been testing the ACA marketplace for over a decade now. More than 85% of phony applications have been approved for government-subsidized plans. 

If fraud testers can get – and keep – this much subsidized coverage, imagine what professional bad actors can do.  

ACA Fraud, by the Numbers 

The secret shoppers are just designed to find holes in the system, not estimate all instances of fraud in the ACA marketplace.  

But GAO auditors took a closer look at the data, and what they found was shocking. In 2023 alone: 

  • $21 billion in subsidies went to people who never filed the required tax paperwork – that’s nearly a quarter of all ACA subsidy spending that year.  
  • 183,000 complaints from people saying they were enrolled in ACA plans without their consent 
  • 160,000 suspicious, likely unauthorized plan changes 
  • 66,000 Social Security numbers were being used for multiple plans. One number was associated with 125 different insurance policies. 
  • 58,000 Social Security numbers belonging to dead people were being used, receiving tens of millions of dollars in subsidies per year.  

How ACA Fraud Works 

The GAO report looks at two specific types of fraud: identity abuse and broker misconduct.  

Identity abuse is the most straightforward. Fraudsters use a stolen Social Security number to create one or more fake identities and register for subsidized insurance plans. They then turn around and sell these plans under the table to other people who don’t qualify for ACA coverage.  

GAO doesn’t estimate who these identify thieves are or who they sell the fraudulent insurance plans to. But presumably, the buyers are people who want coverage but don’t qualify for the subsidies, potentially because their income is too high, they don’t file taxes, or they are undocumented immigrants. 

Broker misconduct takes a different form. Health insurance brokers are the middlemen who help patients pick the right plan on the ACA Marketplace. And in most cases, brokers have the authority to enroll a patient in a plan on their behalf. 

Brokers are paid by the insurance companies, and they often earn a small commission for every new enrollee they bring in. That’s where the abuse happens. The GAO identified 160,000 cases in 2024 where one patient’s plan was changed 3 or more times over a short period, likely suggesting broker fraud. In one example, a single patient was swapped between 9 different plans from 8 different brokers in just one day. The GAO suspects these changes were made without the patient’s knowledge or consent, and the brokers collected a fee every time they made a switch.  

While broker fees are paid by the insurance companies, the costs end up getting passed to the taxpayers eventually. Insurance companies raise premiums the next year to cover those costs, and the ACA subsidies rise in response.  

While the GAO’s report only focused on these two specific schemes, other investigators have found even more fraud in the system. 

The Paragon Health Institute, a conservative think tank, found that 35% of ACA enrollees didn’t make a single claim in 2024. Insurance companies collected billions in taxpayer dollars to cover these no-show patients, and they didn’t have to spend a dime to treat them.  

Maybe these are just healthy people who didn’t need to visit the doctor last year. But Paragon believes the insurance brokers are enrolling millions of people in plans without their knowledge, collecting fees and subsidies without ever providing health care.  

CommonGround Takes On ACA Fraud 

The bipartisan CommonGround bill includes strong anti-fraud measures that address many of GAO’s top concerns, especially when it comes to broker misconduct. These are the key rules: 

  • Harsher penalties for insurance brokers who submit fake applications or switch consumers between plans without consent, with penalties up to 10 years in prison or a $200,000 fine per violation. 
  • Insurance brokers must provide written consent from the patient before any changes can be made to their plan. 
  • Brokers cannot collect commissions until HHS verifies the patient’s identity and eligibility. 
  • The Department of Health and Human Services (HHS) must randomly audit insurance brokers. 
  • Patients must be notified every time their plan, tax credit, or broker changes 
  • HHS must randomly audit insurance brokers 

The bill also requires HHS to run routine death-data checks and automatically remove deceased individuals from the rolls, so fraudsters can’t steal their Social Security number to enroll in more plans.  

This plan is already supported by members of both parties, and it can become law if Congress acts in time. As Congressman Josh Gottheimer said, “We must get this done now. We must find common ground. Time is running out; we simply cannot delay.”