Obamacare Subsidies for People Who Don’t Exist!?

The federal government just confirmed what millions of taxpayers have suspected for years: the Obamacare subsidy system is hemorrhaging money through fraud, fake identities, and outright negligence. A new report from the Government Accountability Office (GAO-26-108742) reveals that billions of dollars in Affordable Care Act (ACA) subsidies are being paid out for people who either shouldn’t qualify — or don’t exist at all! That money is going somewhere to benefit someone. Despite the Democrats’ heavy public relations effort to frame this as aid for “the poor,” the facts show it actually benefits only the super-rich.

Fraud by Design: Fake People, Real Taxpayer Money

The GAO conducted covert tests in 2024 and 2025 by submitting multiple fictitious Obamacare applications. The results are staggering. Ninety-six percent (96%) of these fake applications were approved without question. To make matters even worse, as of the date of publishing their report, seventy-five percent (75%) of the phony applications are still paying insurance companies to cover fake “people” whom the GAO confirms it invented out of thin air!

Let that sink in. Fake enrollees are still receiving taxpayer-subsidized coverage from the US Treasury. There’s zero risk that these non-existent people will ever file a claim. Yet, our federal government continues to empty the treasury into the deep pockets of billionaire insurance moguls — under a system that guarantees payment but demands no verification.

Applicants submitted invalid Social Security numbers, no citizenship documents, and no income verification — and were still approved. The GAO writes:

“All of our fictitious applicants received subsidized coverage… about $2,350 per month.” (pp. 9–10)

And the 2025 numbers are even worse:

“As of September 2025, coverage for fictitious enrollees remained active, totaling over $10,000 per month in subsidies.” (p. 12)

They Can’t Tell Between Real and Fake

In other words, the federal system cannot discern a real person from a made-up one. It’s also glaringly clear that there is zero due diligence anywhere near the system — by design. The GAO report does not assign verification duties to insurers but to the Centers for Medicare & Medicaid Services (CMS) and the Marketplace infrastructure that the CMS oversees. So, insurers receive subsidy payments based on those determinations. Still, as good Americans, one would expect insurance companies to at least do a modicum of checking… but there’s that nasty profit incentive, silently encouraging them to shut up and just take the money.

Using Obamacare policies written exclusively by the Democratic Party, the CMS does the approving, and insurers cash the checks — no questions asked. Period. So, by hiding behind terms like “helping the poor,” the Democrats are successfully fleecing the country blind while their policies continue to demand that there be zero accountability for fraud.

Tens of Thousands of Duplicate Social Security Numbers

The deeper data analysis from GAO continues to be devastating: 29,000+ SSNs were used to obtain more than 365 days of subsidized coverage in a single year (2023). 66,000+ more SSNs were used the same way in just 2024 — effectively allowing insurers to receive taxpayer-funded subsidy payments representing multiple years of coverage in a single year for the same “person” (p. 13).

One SSN was used to obtain 26,000 days of subsidized coverage across 125 policies — the equivalent of 71 years of insurance for one person (p. 13). GAO’s conclusion is blunt: the system does not prevent multiple people from using the same SSN. That gaping hole is so huge that it can’t possibly be an accident. The system is rigged for abuse, and there’s only one beneficiary, and it’s not the poor.

Dead People Are Also Getting Coverage

In Louisiana, stories about deceased individuals appearing on voter rolls are ingrained in our political culture. Now, the GAO has confirmed a national parallel in the healthcare subsidy system. That’s because the GAO also found that 58,000 SSNs receiving subsidies matched the Social Security death file (p. 14). At least $94 million in subsidies was paid on behalf of individuals who were supposedly deceased.

Because the CMS doesn’t routinely check death records, fake or synthetic identities just continue indefinitely. That money just keeps on flowing.

The System Encourages Waste — Because It Doesn’t Verify Anything By Design

GAO found that marketplaces routinely failed to request documentation, ignored bogus SSNs, and accepted counterfeit documents that the GAO intentionally fabricated. In one case, the GAO literally submitted nothing, and the marketplace still “verified” income (p. 10–11).

This isn’t a loophole; Obamacare is literally designed to be overly accommodating to fraud. It is an intentionally broken system that the Democrats are desperately fighting to keep alive. All you have to do is check any of their social media profiles to see a conga line of posts about their “poor constituents” calling them about skyrocketing insurance premiums. As far as anyone can tell, this is the same familiar “I received 200 phone calls” tactic that “Comedy Hour” Kenneth Boudreaux just used to get the Mardi Gras parade to pass in front of a supporter’s multiple businesses.

If you thought Kenneth Boudreaux making a circus of Mardi Gras was bad, just look at the three-ring circus the national Democrats are running. The entire effort appears to be an attempt to help their billionaire insurance mogul donors keep their endless subsidies. Waste, fraud, and abuse aren’t unintended consequences, side effects, or even accidents but the result of the system’s design.

Why This Happens: The Obamacare Subsidy Structure Itself

Subsidies under the ACA are advance payments (Advance Premium Tax Credits or APTC). The federal government sends money directly to insurers before confirming eligibility. GAO found that over $21 billion (with a B) in annual subsidies showed zero evidence of reconciliation with tax data (p. 12). Translation: you don’t even have to prove you deserved the subsidy — you don’t even have to prove you’re alive — insurance companies just get a very large check from the US Treasury on behalf of a name that may or may not exist!

A Real Solution: Health Savings Accounts (HSAs)

If enough cheese is stacked up in one place, the rats are sure to find it. The ACA built an incentive system that rewards fraud and punishes responsibility. When subsidies are tied to unverifiable personal claims, guess what gets rewarded:

• Fake identities
• Duplicate SSNs
• Dead people on the rolls
• Billions in unreconciled advance payments

In fact, would it be within the realm of possibility for insurance companies to pay call centers to enter fake applications all day? The profit incentive encourages them to shut up. But does it also encourage active intervention like this, even if through intermediaries? And why not? Nobody is even checking it!

HSAs, by contrast, avoid every one of these pitfalls.

Why HSAs Work:

1. Owned by the individual — not dependent on unverifiable identity claims. You can’t create a fake HSA holder because the account must be legally opened and funded.
2. No advance subsidies for people who don’t exist. Money is deposited into a real bank account, not floated in bulk to insurers for imaginary people.
3. Consumer-driven, not bureaucracy-driven. HSAs give individuals absolute, portable control over their health spending.
4. Eliminates the “subsidy chase.” Fraudulent brokers cannot hijack bank accounts the way they can hijack ACA enrollments.
5. Reduces federal exposure to fraud. Every dollar is traceable — unlike the APTC system, which, as the GAO has repeatedly shown, prefers not to verify anything.

GAO’s findings confirm what critics have said for decades: the Obamacare subsidy system is so structurally weak that fraud is the expected outcome. Fake people get full insurance coverage paid for by your tax dollars. Dead people get health insurance. Duplicate SSNs rack up decades’ worth of benefits for a single “individual” in a single year. Billions of dollars go unreconciled every year.

Meanwhile, taxpayers are footing the bill for phantom beneficiaries. If Washington wants to stop the bleeding, it must move away from a subsidy-first model and toward a patient-first model — one rooted in transparency, ownership, and real accountability. The good news is that such a model exists and has been proposed as the solution to this very problem for over a decade.

That model is called a Health Savings Account.

Lawmakers across the Republican spectrum have acknowledged this reality. Louisiana’s own Sen. Bill Cassidy has repeatedly proposed replacing Obamacare’s unaccountable subsidy system with consumer-owned Health Savings Accounts under his “Patient Freedom Act,” including S.1531 in 2015 and S.191 in 2017. He has continued to advance the framework in subsequent years. Speaker Mike Johnson and President Donald Trump have also publicly endorsed the HSA concept as a superior, fraud-resistant alternative to Obamacare.

In a mostly party-line cloture vote just days ago, Senate Democrats successfully blocked Senators Mike Crapo and Bill Cassidy’s Health Care Freedom for Patients Act of 2025. Senator Rand Paul (R-KY) was the sole Republican to join Democrats in opposing the reform measure.

Despite years of discussion and numerous attempts, Congress has never enacted legislation to transition toward HSAs. That leaves taxpayers trapped in a system the GAO now confirms is structurally designed to reward abuse. The Democratic Party’s continued use of the filibuster to defend this failed system ensures that billions in unverified subsidy dollars keep flowing to billionaire insurance companies in the names of people who do not exist. If that isn’t the definition of grift, then nothing is.

###