What health policy experts say
Senate Majority Leader John Thune, a Republican from South Dakota, at a news conference following the weekly Senate Republican policy luncheon at the Capitol in Washington, Nov. 19, 2025.
Eric Lee | Bloomberg | Getty Images
As lawmakers continue to debate the Affordable Care Act’s expansion of premium subsidies, Republicans cited reports of fraud in the health insurance market as one reason they won’t extend the tax break.
GOP lawmakers issued a quote 3 December report From the U.S. Government Accountability Office, a nonpartisan congressional watchdog on fraud tied to ACA subsidies.
Senate Majority Leader John Thune, R.S.D., said Democrats’ proposal to extend ACA enhanced credits “is very common, along with fraud and abuse, and I say it’s very common.” in question on the Senate floor Thursday.
Some health policy experts say the scope of the fraud is not as serious as lawmakers suggest and that it would be better to improve the ACA’s safeguards rather than cutting the increased subsidies altogether.
“The scope of the fraud is really negligible,” said Michael Gusmano, a professor of health policy at Lehigh University. “This is just a scare tactic used to justify reducing the federal government’s role in subsidizing health insurance,” he said.
He pointed to one finding as an example: According to the GAO, more than 58,000 people with a Social Security number who died in 2023 also received premium support. This accounted for just 0.4% of all Social Security numbers receiving premium tax credits that year, the GAO found.
Republicans cite ACA fraud as obstacle
Senate Democrats have proposed expanding enhanced ACA subsidies. It expires at the end of the year – another three years. These subsidies reduce insurance premiums for ACA enrollees.
About 22 million people, or 92% of ACA enrollees, receive these benefits, according to KFF, a nonpartisan health policy research group. Without them, KFF estimates that buyers’ insurance premiums would more than double on average by 2026.
Republicans have proposed a plan that would allow enhanced ACA subsidies to expire. Instead, they will pay up to $1,500 to consumers with health savings accounts.
Both measures failed in the Senate on Thursday.
House Speaker Mike Johnson (R-La.) said Tuesday that he will not vote to extend enhanced ACA subsidies, which virtually guarantees those subsidies will end as planned.
Republican lawmakers cited fraud as the main reason for not extending the subsidies.
“We will never have a competitive marketplace when the marketplace is riddled with fraud,” said Sen. Bill Hagerty, R-Tenn. in question Thursday.
The GAO report outlined several channels of fraud involving ACA subsidies available in the federal marketplace used by approximately 30 states. The rest run their own marketplaces.
“When you look [the] “The facts of this report make the depth of negligence undeniable,” said Rep. Jefferson Van Drew, R-N.J., chairman of the House Judicial Oversight Subcommittee. hearing ACA subsidy scam Wednesday.
The report comes after President Donald Trump and Republicans recently lashed out at fraud in other welfare programs.
For example, President Trump recently he said he didn’t want Somali immigrants in the USA describe Minnesota, which has a large Somali population, as a “fraudulent money laundering center”. Many of the alleged perpetrators of a series of fraud scandals are presumed to have ties to social safety net programs in this state. more than $1 billionSomalis.
The late Senator John McCain (R-AZ) leaves the Senate Chamber following a vote on the simplified or ‘Skinny Repeal’ version of Obamacare reform in Washington, DC, on July 28, 2017. McCain was one of three Republican Senators to vote against the measure.
Zach Gibson | Getty Images News | Getty Images
Republicans have also tried to dismantle the ACA since its early days. This year, the multibillion-dollar GOP tax cut package known as the “big beautiful bill” made several administrative adjustments to the ACA; As a result, more than 3 million people are expected to lose coverage over the next decade.
In 2017, a Republican measure to repeal and replace the ACA failed after dramatic “no” votes from three GOP defectors, including the late Sen. John McCain of Arizona.
GAO report finds fake people receiving ACA subsidies
GAO submitted fictitious applications through the federal ACA marketplace in 2024 and 2025 through secret testing.
The report stated that the federal marketplace approved all four fraudulent applications GAO submitted in 2024, and that these applications paid premium subsidies totaling $2,350 per month directly to insurers.
In 2025, GAO submitted 20 more fictitious applications; Of these, 18 have been confirmed and are still active as of September 2025, the report said. Total premium subsidies paid to insurers were stated to be more than $10,000 per month.
The findings point to “records control weaknesses,” the GAO wrote.
However, the findings cannot be generalized to the entire ACA-enrolled population and are consistent with the results of similar tests conducted from 2014 to 2016, according to the GAO.
Subsidies have been available since 2014, in the early days of the Affordable Care Act, also known as Obamacare. Subsidies called premium tax credits were increased in 2021, ensuring that the credit is more valuable and available to more households.
“My main takeaway from the report is that fraud is a persistent problem for the federal Market, as we would expect from any federal program where significant subsidies are involved,” Kaye Pestaina, director of KFF’s patient and consumer protection program, wrote in an email.
“This is no small thing, but the GAO report does not show that this is an outlier compared to fraud in other federal programs,” he wrote.
Scam tied to Social Security numbers
More than 58,000 people with Social Security numbers who died in 2023 were also given premium tax credits, according to the GAO.
It’s unclear how many of those people were legally entitled to subsidies and later died, Gusmano said.
Additionally, there were cases where social security numbers were used multiple times to apply for benefits. GAO found more than 29,000 Social Security numbers with more than 365 days of coverage with ACA subsidies in 2023 and nearly 66,000 in 2024.
House Speaker Mike Johnson, R-La., House Majority Leader Steve Scalise, R-La., left, and House Majority Leader Tom Emmer, R-Minn., discuss rising health insurance premiums during a news conference at the Capitol Building on Dec. 10, 2025 in Washington.
Heather Diehl | Getty Images
But Lehigh University’s Gusmano said the raw numbers are misleading. They mask that the numbers represent a small fraction of overall subsidy recipients, he said.
For example, in addition to data on deceased individuals accounting for 0.4% of all Social Security numbers receiving premium tax credits in 2023, GAO found that instances of multiple use of Social Security numbers accounted for 0.2% of all numbers in 2023 and approximately 0.4% in 2024.
“I don’t think they uncovered massive fraud and abuse,” Gusmano said. “Some things immediately look like scary numbers if you ignore the denominator.”
Gusmano said even for those who think fraud is a big deal, reforming the system to reduce waste rather than letting increased subsidies expire would be a reasonable response.
“The idea of going to zero in terms of any problem in any system, if we apply that to any program, public or private, they all have to shut down,” he said. “This is a deeply problematic standard.”
Senate Minority Leader Chuck Schumer, a Democrat from New York, during a press conference following the weekly Senate Democratic policy luncheon at the U.S. Capitol in Washington, D.C., on December 2, 2025. As the stalemate in Congress deepens, it becomes more likely that Obamacare subsidies will expire at the end of the month, leading to a surge in health insurance premiums.
Graeme Sloan/Bloomberg via Getty Images
The negative financial consequences for households and public health impacts of not extending subsidies far outweigh losses from fraud, experts said.
According to KFF, the average subsidy recipient would see their out-of-pocket premium payments increase from about $900 in 2025 to about $1,900 in 2026 if the enhanced subsidies were eliminated. Many households will lose the benefit altogether. Approximately 4.8 million people is expected to fall They will have health insurance next year if increased subsidies end, according to the Urban Institute.
I don’t think they uncovered any major fraud and abuse.
Michael Gusmano
professor of health policy at Lehigh University
The U.S. should extend subsidies through 2026, said Nick Fabrizio, a health policy expert and associate professor at Cornell University’s Jeb E. Brooks School of Public Policy.
But unlike the Democrats’ proposal, he said the extension should be tied to reforms that would narrow the scope for fraud in the federal marketplace and put a cap on ballooning costs in the broader health care system.
“We’re in one of those situations where we have to extend subsidies,” he said. “We have no choice. But we have to stabilize the system. … We have to meet somewhere in the middle.”
ACA fraud risk increases as program grows
Fabrizio said it’s inevitable that a major government program will involve some level of fraud or corruption.
The GAO report notes that fraud risks will likely increase as ACA subsidies grow, and that the Centers for Medicare & Medicaid Services has not updated its fraud risk assessment since 2018, before enhanced ACA subsidies became available.
For example, according to the report, CMS estimates the premium tax credit will be approximately $124 billion in 2024; This is more than double the $53 billion in 2018.
It was stated that this growth may require additional fraud checks.
“There is fraud in every insurance program I have ever looked at,” said Gerard Anderson, professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. “If there is money to be made by committing fraud at some level, people will take advantage of it.”
Anderson said he thinks the government should make changes to some parameters of the ACA subsidy system.
For example, enhanced subsidies allow some low-income ACA enrollees to get health insurance with a $0 premium. CMS has found that such zero-premium plans are a potential pathway to fraud; Insurance brokers can enroll people in plans without their knowledge and collect commissions from insurers in the process.
Even implementing a small bonus would reduce this type of fraud, Anderson said.
“I think you always have to adjust the parameters of the system,” he said. “Revision is appropriate because you can’t predict everything that will happen.”
