No one spends a dollar better than the person who earned it. That adage reveals the crux of massive fraud and improper payments that plague federal health insurance programs and drive up costs for taxpayers.

According to a report from the Government Accountability Office, more than 95% of the fictitious applications the GAO created and attempted to enroll in Obamacare were approved and enrolled, with insurance companies receiving thousands of taxpayers’ dollars per month on behalf of those fake enrollees. 

The details of the GAO report reveal the utter negligence and perverse incentives that result when the federal government puts taxpayers’ money up for grabs for people who didn’t earn it.

That includes the agents and brokers who receive commissions from insurance companies when they enroll individuals—real or fake—into federal marketplace health plans. Most Obamacare enrollments are assisted by an agent or broker.

And it includes the insurance companies that can receive upward of $10,000 per year of taxpayers’ money for every individual—real or fake—enrolled in their plans.

For instance, out of four fake applicants GAO sought to enroll in 2024, two were initially flagged by the system’s automatic identity checks, but later cleared after submitting fictitious identification documents, including fake citizenship documents.

In the other two cases, in which GAO worked with brokers to enroll fake applicants, the system the brokers used initially flagged the applicants’ Social Security numbers as unverified. But after the GAO’s fake applicants authorized their brokers........

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