Big surprise, the ACA expansions are still rife with fraud

Dec 23, 2025 by AFP

Why are so many fighting to make ACA subsidy expansions permanent?

We’ve heard it before:

“We can’t let the temporary Affordable Care Act expansions expire because so many depend on them.”

In reality, when the expansions expire, the U.S. Treasury will cover 80% of the cost of a health insurance policy, on average, compared to 90% under the expansions. And every penny of those subsidies goes straight to insurance companies, not patients.

A new Government Accountability Office report just revealed the truth Democratic lawmakers don’t want to face:

The ACA marketplaces are a magnet for fraud — and the Covid-era expansions made the problem explode.

The problem: A system built on fraud and zero accountability

Over the 2024 and 2025 plan years, GAO created 20 fictitious identities and submitted 24 fake applications for subsidized coverage.

The results of this test?

The bureaucracy approved 23 of the 24 submissions.

In fact, in 2025 alone, 19 out of 20 fake applicants were approved, and 18 had active, subsidized coverage just months later.

  • Fake Social Security numbers
  • Unverifiable identities
  • Contradictory incomes
  • No documentation

Didn’t matter to the bureaucrats. Subsidies were approved at your expense.

The evidence for fraud is, unfortunately, clear.

Under the law, the IRS is supposed to verify that anyone who receives federal advance premium tax credits is actually eligible.

GAO discovered that it simply isn’t happening.

In the report’s words:

“We could not identify evidence of reconciliation in IRS tax data for over $21 billion in advance premium tax credits for 2023.”

Nearly one-third of all subsidies paid had no matching tax return. This means that for four years straight, millions of people collected subsidies without verification.

The extent of the fraud gets worse:

  • 66,000+ Social Security numbers showed more than 366 days of insurance coverage in 2024 — something that’s impossible without fraud or error.
  • One SSN used 125 insurance plans to stack benefits and trigger more tax checks to insurers and their agents and brokers.
  • At least 58,000 SSNs receiving subsidies matched people who were dead.

An investigation by the Paragon Health Institute uncovered at least 6.4 million improper enrollees in 2025, costing taxpayers $27 billion this year alone.

That’s what happens when a program incentivizes expanding enrollment with no guardrails.

What supporters can’t admit

If Obamacare were a sustainable, workable system, lawmakers wouldn’t need to rely on emergency subsidies to keep it afloat.

Instead of working, the “Affordable” Care Act has driven up premiums and served to enrich insurance companies, brokers, and agents.

Meanwhile, Congress is using a long-expired emergency to justify endless spending as:

  • Improper enrollment continues
  • Zero-claim (phantom) enrollees skyrocket
  • Brokers sign people up without their knowledge
  • Wealthy households qualify for subsidized care
  • Fraudsters exploit verification gaps

This isn’t compassion. It’s dysfunction.

Solving the problem: Let the Covid-era expansions expire

Virtually every temporary pandemic policy has already ended.

The ACA expansions should go too, especially as more fraud is uncovered.

This won’t leave the vulnerable without coverage. We know that 60% of eligible enrollees will have access to coverage that costs them less than $50 a month — less than $2 a day.

Instead, letting the extra subsidies expire will:

  • Halt the flood of improper and fraudulent enrollees
  • Restore basic accountability to a broken program
  • Stop sending subsidies to those who don’t use or need them
  • Prevent billions more in taxpayer waste

A long-term fix: A Personal Option for health care

Letting these bloated expansions expire is a good step toward normalcy.

But to build a system that actually works, we need to embrace the Personal Option — one that gives you control over your health care through:

  • Better access to direct primary care
  • Expanded, tax-free health savings accounts
  • Competition that drives down costs
  • Coverage chosen by you, not Washington

That’s how we make health care affordable again — by empowering patients, not enriching insurance providers.

What you can do

The pandemic is over, but Washington is in denial.

✍️ Add your name urging Congress to end the expansions and support the Personal Option for health care.

🔍 Dive deeper. Learn more about AFP’s Personal Option health care agenda.

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