The new Washington Post editorial board continues to be a surprise. I suspect they have posted more right-leaning material in the past 3 months than was published in the paper during Biden's entire term in office.
In any case, today the Post makes the case that Obamacare subsidies, the coming expiration of which was the stated reason Democrats shut down the government, should not be extended. Why? Because there is lots of evidence suggesting the program is rife with fraud.
On party-line votes in 2021 and 2022, Democrats invoked the pandemic emergency to temporarily expand eligibility for Obamacare insurance subsidies. Preserving these credits, which are due to expire at the end of the year, would cost $350 billion over the next decade. Democratic leaders are trying to keep the subsidies intact without reforms to address abuse that has grown rampant in the system.
A report issued last week by the nonpartisan Government Accountability Office underscores why that should be a nonstarter.
The report they're referring to was published by the General Accounting Office (GAO). It's titled "Preliminary Results from Ongoing Review Suggest Fraud Risks in the Advance Premium Tax Credit Persist." What GAO staff did was create 20 fake identities and then apply for coverage as if they were real people.
To test enrollment controls, we developed and submitted four fictitious applications to obtain insurance coverage with APTC through the federal Marketplace. We applied for coverage for these four applicants in October 2024. We submitted the applications outside of the open enrollment period, using a special enrollment period for low-income applicants.20 In two cases, we applied for coverage directly through HealthCare.gov. In the other two cases, we applied via telephone with assistance from an insurance broker.21 The brokers that assisted us used EDE systems to submit our applications.
The federal Marketplace approved fully subsidized insurance coverage for all four of our fictitious applicants for November through December 2024. The combined total amount of APTC paid to insurance companies for all four fictitious enrollees was about $2,350 per month.
Next they tried the same approach with 20 fake identities applying for 2025 coverage. All but one were initially approved.
To further test enrollment controls, we developed 20 fictitious applications to obtain insurance coverage with APTC through the federal Marketplace for plan year 2025.28 Although our work is ongoing, the federal Marketplace initially approved coverage for 19 of our 20 fictitious applicants for plan year 2025. We did not pursue one application when the broker we were working with stopped responding to us. Additionally, the Marketplace subsequently cancelled coverage for one fictitious enrollee for which we did not provide the requested documentation to support citizenship status. As a result, as of September 2025, coverage for 18 fictitious enrollees remained active.
They also found individual Social Security numbers which had been used multiple times for different applications. In once case, a single SSN was connected to 125 different policies who were receiving tax credits.
Our preliminary analysis of federal Marketplace data identified over 29,000 SSNs (0.21 percent of SSNs that received APTC) with more than 365 days of insurance coverage with APTC in plan year 2023. For example, the most frequently used SSN in plan year 2023 was used to receive subsidized insurance coverage for over 26,000 days (over 71 years of coverage) across over 125 insurance policies.
They identified another 58,000 SSNs that were receiving subsidies despite belonging to dead people.
Our preliminary analysis of plan year 2023 data identified over 58,000 SSNs that received APTC and matched SSA death data (about 0.42 percent of SSNs that received APTC that year).
In 7,000 cases the person applying for coverage had the same exact name and SSN as someone marked as deceased. In another 19,000 cases someone was applying for coverage using an SSN associated with a deceased person but using a different name. All together the money paid out to people using SSNs associated with the dead was nearly $100 million.
Getting back to the Post editorial, the total potential for fraud here adds up to billions of dollars per year. In 2023 alone, around $21 billion in tax credits was given to people who never verified their income.
There are also a very unusual number of people who apply for coverage and never use it. As the editorial points out, there are always some young and healthy people who don't need insurance in a given year but the percentage among Obamacare recipients is extremely high.
Since the expanded subsidies came into effect, the number of enrollees in the marketplace plans who make zero claims has soared. The number was stable between 3 million and 4 million before 2021 and increased to more than 11 million last year, according to data from the Centers for Medicare and Medicaid Services (CMS).
Not using coverage is not evidence of fraud on its own. About 16 percent of non-senior adults on private insurance markets don’t use insurance in a given year. But 35 percent of Obamacare marketplace plans had zero claims in 2024, up from below 20 percent before subsidies expanded.
What could account for this? One possibility is that insurance companies are applying for people who don't even know they have coverage. Obamacare payments go directly to the insurer, so if someone applied using your information and no claims were ever made, you might not know.
We know this type of fraud is happening. Last month, a jury in Florida convicted the CEO of a health care brokerage for pulling off a fraud scheme that cost the government $180 million.
According to court documents and evidence presented at trial, Cory Lloyd, 46, of Stuart, Florida, and Steven Strong, 42, of Mansfield, Texas, engaged in an extensive fraud scheme that sought over $233 million in fraudulent ACA plan subsidies for which the federal government paid at least $180 million. ACA plans offer tax credits to eligible enrollees. These tax credits, or “subsidies,” are paid by the federal government directly to insurance companies in the form of a payment toward the applicable monthly premium. Evidence presented at trial showed that Lloyd and Strong conspired to enroll consumers in ACA plans that were fully subsidized by the federal government by submitting false and fraudulent applications for individuals whose income did not meet the minimum requirements to be eligible for the subsidies. Lloyd received commission and other payments from an insurance company in exchange for enrolling consumers in the ACA plans. In turn, Lloyd paid commissions to Strong in exchange for consumer referrals.
There are undoubtedly billions in fraud every year and the amount of fraud has gone up dramatically since Democrats expanded subsidies. This is the system they shut down the government to demand we continue as is at taxpayer's expense.
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