GAO Still Finds Fake Applicants Approved for ACA Subsidies

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By Sara Hansard

Oct. 22 — Ten fictitious applicants were approved to receive federal subsidies for health insurance policies in the Affordable Care Act 2015 marketplaces, the Government Accountability Office said in testimony released Oct. 22.

This is the third time the GAO's undercover testing has found that fake applicants for ACA subsidies were approved through the marketplaces. GAO forensic audits director Seto Bagdoyan is scheduled to testify at an Oct. 23 hearing of the House Energy and Commerce Subcommittee on Health.

The GAO tested application and enrollment controls for obtaining subsidized health plans through the federal health insurance marketplace,, operating in New Jersey and North Dakota and state-run marketplaces in California and Kentucky for 10 fictitious applicants, the testimony said. “Although 8 of these 10 fictitious applications failed the initial identity-checking process, all 10 were subsequently approved by the federal Marketplace or the selected state marketplaces,” according to Bagdoyan's prepared testimony.

Congressional Budget Office estimates of subsidies and related spending under the ACA is $60 billion for fiscal 2016, rising to $105 billion for fiscal 2025 and totaling $880 billion for fiscal years 2016-2025, according to the testimony. The ACA requires verification of applicant information to determine enrollment or subsidy eligibility, it said.

Fake Medicaid Applicants Also Enrolled

For eight additional fictitious applicants, the GAO tested enrollment in Medicaid through the same federal marketplace and the two state marketplaces, and was able to obtain either Medicaid or subsidized marketplace coverage for seven of the eight applicants, the testimony said. Three were approved for Medicaid, which was the health-care program for which the GAO had sought approval, it said.

The GAO was unable to enroll its fictitious applicants in Medicaid in California because it didn't provide Social Security numbers, according to the testimony. Among the other applications for both the ACA marketplaces and for Medicaid, the GAO provided Social Security numbers that have never been issued—such as numbers starting with “000,” identity information that wouldn't have matched Social Security Administration records and a fake immigration card.

Only Obvious Alterations Checked

The testimony said that according to officials from the Centers for Medicaid & Medicare Services, California, Kentucky and North Dakota, “the marketplaces and Medicaid offices only inspect for supporting documentation that has obviously been altered. Thus, if the documentation submitted does not show such signs, it would not be questioned for authenticity.”

California and Kentucky marketplaces have been praised by many ACA supporters as examples of marketplaces that have operated successfully and enrolled many people eligible for health insurance subsidies or Medicaid. The GAO said its work is continuing and it plans to issue a final report at a later date.

To contact the reporter on this story: Sara Hansard in Washington at

To contact the editor responsible for this story: Janey Cohen at