- A GAO investigation found that fraudulent Obamacare applications using fake identities were overwhelmingly approved, with federal subsidies paying fictitious accounts $6,700 per applicant annually.
- Expanded subsidies under Joe Biden, including $0 per month coverage for the unemployed and higher-income eligibility through 2025, dramatically increased federal spending on Obamacare from $57 billion in 2019 to $124 billion in 2024.
- Lawmakers and the GAO warn that overly generous subsidies incentivize fraud and contribute to higher insurance premiums.
A COVID-19-era change to the Affordable Care Act, often referred to as “Obamacare” has been funneling money to insurance companies without providing individuals with health care, according to a recent nonpartisan Government Accountability Office report.
In its undercover fraud test, the GAO submitted health insurance applications — using fake identities — to the federal ACA marketplace and to insurance brokers.
All but one of the 24 applicants were approved, and 18 still had active insurance after 11 months. As The Wall Street Journal noted, the federal subsidies paid $6,700 to insurance companies for each applicant annually. The investigation began in October 2024.
In some cases, the report says they “were not prompted to provide documentation” to verify their identity. In others, the Affordable Care Act exchange “notified us that it had verified the applicant’s estimated income based on documentation we submitted. However, we did not submit documentation.”
Millions flagged as ‘high fraud risk’
In 2021, former President Joe Biden expanded Obamacare access during the COVID-19 pandemic, automatically qualifying anyone who received unemployment benefits for $0 per month health insurance, per the Economic Development Administration.
Then in 2022, as part of the Inflation Reduction Act, Biden expanded health care subsidies to middle- and upper-middle-income people through 2025.
Eligibility growth dramatically increased how much the federal government spends on the Affordable Care Act. In 2019, it spent $57 billion on ACA subsidies, and in 2024, the amount increased to $124 billion.
The GAO’s report marked 32% of all Advance Premium Tax Credit recipients as “high fraud risk,” because they failed to file a federal income tax return to prove their eligibility for the service.
The GAO also found $94 million paid in insurance subsidies to accounts with death-record problems, in 2023.
Utah Rep. Blake Moore outlines the problems
In a video posted to X, Congressman Blake Moore said American insurance premiums have skyrocketed because of the easy-to-access health care subsidies.
Original ACA subsidies required individuals with poverty-level incomes to pay 2% of their annual income toward their health care premium. If their health insurance cost was $4,000, the individual would pay $313, and the federal government would pay the insurance company for the rest.
But in 2021, Democrats changed the rule, allowing low-income individuals to pay 0% for their health care.
“Unfortunately, when you subsidize like this, the $4,000 (insurance plan) in 2014 has probably doubled,” Moore said. “It’s a lot more expensive, because any time you subsidize a market, you don’t put any down pressure on the cost of it,” and prices go way up.
Moore added, lowering premium tax credits to 0% incentivizes fraud. “All the sudden, you can get people signing up for these programs that they don’t even know they’re on,” he said.
“When you’re not required to pay even a dollar, there’s an unknown factor out there, and people can be on them and not even know about it.”
In 2021, Democrats also removed the low-income cap on health care subsidies, opening them. up to people who earn over 400% above poverty level. This type of assistance “should only be for low-income individuals,” Moore said.