In a stunning revelation that sent shockwaves through Capitol Hill, the Government Accountability Office — Congress’ own nonpartisan watchdog — exposed just how absurdly easy it is for fraudsters to siphon federal dollars out of Obamacare. And what Republicans have been warning for years is now undeniable: the system Democrats expanded is so loose, so sloppy, so unguarded, that even people who don’t exist can cash in.
GAO investigators created 24 fake identities across the 2024 and 2025 Obamacare marketplaces. An unbelievable 22 got approved, slipping right through the government’s supposedly “secure” system.
And here’s the kicker:
The fake 2025 accounts alone cost taxpayers over $10,000 every single month.
Yes — nonexistent people are getting real Obamacare subsidies.
And Democrats want to extend this program again.
Republicans: “A Smoking Gun — and Democrats Pulled the Trigger”
House Ways and Means Chair Jason Smith didn’t mince words:
The report is “a smoking gun that shows how this broken system, shielded by Democrat policies, has led to the federal government shoveling tens of billions of tax dollars to insurance companies through identity fraud.”
House Budget Chair Jodey Arrington went further, calling it a “bombshell” and blasting Democrats for propping up a failing government-run system that’s practically begging criminals to take advantage.
Republicans have argued since 2021 — when Democrats rammed through a massive subsidy expansion that made plans free for many low-income enrollees and opened benefits to people well above the middle class — that the changes would explode fraud.
Now the evidence is sitting right in front of Congress.
The Fraud Is Worse Than Anyone Expected
The GAO didn’t do anything sophisticated. No insider tools. No elaborate hacking.
They just applied — with zero proof of:
- Citizenship
- Income
- Eligibility
- Documentation
All four fake applicants for 2024 got approved.
Then in 2025, 19 out of 20 fake enrollees were waved through without issue.
Eighteen bogus accounts STILL had active coverage as of September 2025.
Even more shocking?
The Obamacare system allows multiple people to enroll using the same Social Security number — and GAO found one number used for over 125 insurance plans in 2023.
This isn’t a crack in the system.
This is the system.
Democrats Expanded Subsidies. Fraud Expanded With Them.
Democrats boosted Obamacare subsidies in 2021 and bragged about making plans “free.” Republicans warned it would create an experimental playground for scam brokers — and that’s exactly what’s happening.
Reports are piling up:
- People enrolled in plans they never signed up for
- Americans switched from one plan to another without consent
- Brokers harvesting personal information and cashing in on zero-dollar premium incentives
And while CMS has suspended 850 brokers for suspected fraud, the watchdog says the core system remains wide open.
Yet Democrats want Congress to extend these bloated subsidies for another decade — at a jaw-dropping $350 billion price tag, according to the CBO.
Democrats Respond: Attack Trump, Ignore Fraud
Instead of addressing the avalanche of proof, top Democrat Lloyd Doggett blamed — who else? — President Trump, accusing the administration of “empowering fraudsters.”
His message basically boiled down to:
Don’t look at the fraud. Look over there — Trump!
Meanwhile, Republicans who requested the investigation — including Jason Smith, Jim Jordan, and Brett Guthrie — say the findings prove exactly why extending these subsidies is reckless, irresponsible, and dangerous for taxpayers.
What Happens Next?
The Senate is gearing up for a vote on extending the subsidies next week, but no bipartisan deal exists. Conservatives are digging in. Vulnerable Democrats are cornered. The clock is ticking.
And thanks to the GAO, America now sees the truth:
Obamacare hasn’t just failed — it’s become one of the largest taxpayer-funded fraud pipelines in Washington.
More updates coming as the clash intensifies.