Waste of the Day: Obamacare Failed Test, Approved Fraudulent Subsidies

Topline: Obamacare administrators approved health insurance for 22 of the 24 fake customers created by auditors at the Government Accountability Office, failing a test set up by the government watchdog to test the Centers for Medicare & Medicaid Services’ ability to detect fraud.

The Obamacare fraud test and how the system failed

Key facts: The test began in October 2024 when the GAO used four fake profiles to apply for advanced premium tax credits, which help low-income Americans pay their health insurance premiums.

Two of the fake profiles applied through Healthcare.gov and were approved for coverage based on fictitious identification documents. 

The other two fake profiles submitted applications over the phone through private companies, and their Social Security numbers were flagged as unverified. But when the private companies called CMS to address the issue, government officials approved the applications with invalid Social Security info.

The government spent $2,350 per month to cover the four fake profiles from November to December 2024, according to t

The GAO continued its test with 20 more fake profiles in 2025. Eighteen of them were approved for coverage, costing the government $10,000 per month

Auditors also found 66,000 Social Security numbers that received duplicate insurance coverage in 2024, which the GAO said could be caused by identity theft or data entry mistakes. There was one Social Security number that received subsidies for 26,000 days of insurance in 2023.

CMS officials told the GAO there is no system that blocks Social Security numbers from being used to apply for health insurance twice — and it’s intentional. That way, victims of identity theft can still apply for insurance after their Social Security number has been stolen.

Paying for health insurance with Social Security numbers assigned to the dead

CMS also paid at least $94 million, and potentially far more, for health insurance to people using Social Security numbers belonging to dead people, according to the GAO.

Congress has been squabbling over extending Obamacare subsidies, with a recent Democrat plan aiming for a three-year extension. Extending subsidies for 10 years would cost $350 billion, according to the Congressional Budget Office.

Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com. 

Summary: Subsidized health care should be available only to those who need it; government must improve its fraud prevention measures.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.