Issues with Obamacare Fraud and Increased Spending Revealed

• A GAO study reported that a significant number of fraudulent Obamacare applications using fake identification were approved, resulting in an annual federal aid disbursement of $6,700 per applicant into fictional accounts.
• Federal spending for the Affordable Care Act surged from $57 billion in 2019 to $124 billion in 2024, largely due to expanded subsidies introduced under President Biden. This even included $0 monthly costs for unemployed individuals as well as high-income workers until 2025.
• Both lawmakers and the GAO expressed concerns that overly generous subsidies might encourage fraudulent activities and contribute to rising insurance premiums.

A recent study by the Government Accountability Office (GAO) highlighted how changes made during the pandemic to the Affordable Care Act, commonly known as “Obamacare,” have led to significant funds being channeled to insurance companies rather than to individuals who require healthcare.

In a covert investigation, the GAO utilized fake IDs to submit health insurance applications through federal ACA marketplaces and insurance brokers. Remarkably, all but one out of 24 applications received approval, with 18 still maintaining active insurance coverage after 11 months. This investigation started in October 2024, revealing that the federal aid allowed insurance companies to collect $6,700 annually for each applicant.

Interestingly, the report noted that at times, applicants were “not asked for documentation” to confirm their identity. The Affordable Care Act Exchange even communicated that they verified the applicants’ estimated incomes based on submitted documentation, which in reality, was never provided.

High Fraud Risk for Millions

Following the COVID-19 pandemic, former President Biden expanded access to Obamacare in 2021, automatically providing $0 monthly health insurance for those receiving unemployment benefits.

Further changes in 2022 expanded healthcare subsidies to middle- and upper-middle-income earners, set to last through 2025. The eligibility expansions significantly impacted federal spending on the Affordable Care Act, with expenditures increasing from $57 billion in 2019 to $124 billion by 2024.

The GAO report categorized 32% of all recipients of the Prepaid Premium Tax Credit as being at a “high risk of fraud” because they had not filed a federal income tax return to demonstrate their eligibility for the program. Moreover, the GAO found that in 2023, $94 million in insurance subsidies went to accounts with troubling death records.

Congressman Blake Moore Discusses the Problems

In a video shared on X, Congressman Blake Moore voiced concerns that easily accessible health care subsidies are leading to rising insurance premiums in the U.S. Under the original ACA provisions, individuals with low incomes had to contribute 2% of their annual income toward health insurance premiums. So, for a $4,000 insurance premium, a person would pay around $313, while the rest was covered by federal funds.

However, changes made in 2021 allowed low-income individuals to pay nothing for their healthcare costs, which Moore suggests has significant repercussions. He remarked, “Unfortunately, with a subsidy like this, a $4,000 insurance plan from 2014 could easily double. When you inject subsidies into a market, it inflates costs since there’s no pressure to lower prices.”

Moore cautioned that reducing the premium tax credit to 0% would open doors to fraud, stating, “Suddenly, individuals could be enrolling in such programs without even being aware.” He further expressed concern that if no fees are involved, people might unknowingly engage with these programs.

The Democratic Party also lifted the cap on subsidies for low-income individuals in 2021, allowing assistance to reach those earning over 400% of the poverty level. Moore argued that these benefits should primarily target low-income individuals.