This morning, the Government Accountability Office (GAO) released a damning report showing that the Affordable Care Act’s exchanges are highly vulnerable to fraud. The report was requested by Energy and Commerce Committee Chairman Brett Guthrie, Judiciary Committee Chairman Jim Jordan, and Ways and Means Committee Chairman Jason Smith.
As a result of expanded subsidies and porous federal oversight, the federal exchange approved subsidized health insurance for 23 of 24 fictitious applications submitted by GAO. In addition, GAO found that tens of billions of dollars in advanced subsidies to health insurers have not been properly reconciled. Together, these failures show that the ACA exchanges lack even minimal oversight and are rife with fraud and abuse that is hemorrhaging taxpayer dollars.
GAO’s findings are strong confirmation of Paragon research into improper and phantom enrollment. We identified an estimated 6.4 million improper enrollees in fully subsidized plans in 2025. The massive surge, driven by people unaware of their enrollment or with other coverage, has caused a doubling in the percentage of exchange enrollees without any medical claims from 2021 to 2024.