Federal Watchdog Reveals Rampant Obamacare Fraud; 90% Of Bad-Doc Applicants Approved In Undercover Test

A new bombshell report from the Government Accountability Office (GAO) details a long-running vulnerability in the Affordable Care Act exchanges, showing that weak verification controls continue to expose federal subsidies to significant fraud and abuse. 

“Preliminary results from GAO's ongoing covert testing suggest fraud risks in the advance premium tax credit (APTC) persist,” the report reads. “The federal Marketplace approved coverage for nearly all of GAO's fictitious applicants in plan years 2024 and 2025, generally consistent with similar GAO testing in plan years 2014 through 2016.”

According to the report, GAO conducted undercover tests by creating fictitious applicants with fake identities and fraudulent or never-issued Social Security numbers to see how the federal Marketplace would respond. Over the past two years, 90% of those fake applicants were approved for subsidized coverage despite lacking required documentation. In plan year 2024, all four of GAO’s fabricated applicants were approved and received about $2,350 per month in subsidies paid to insurers, even though they failed to provide proof of Social Security numbers, citizenship, or income. GAO scaled up the test for 2025 to 20 fake applicants; 18 were still enrolled as of September 2025, generating more than $10,000 per month in subsidies

More broadly, GAO's preliminary analyses identified vulnerabilities related to potential SSN misuse and likely unauthorized enrollment changes in federal Marketplace data for plan years 2023 and 2024. Such issues can contribute to APTC that is not reconciled through enrollees' tax filings to determine the amount of premium tax credit for which enrollees were ultimately eligible. GAO's preliminary analysis of data from tax year 2023 could not identify evidence of reconciliation for over $21 billion in APTC for enrollees who provided SSNs to the federal Marketplace for plan year 2023. Unreconciled APTC may not necessarily represent overpayments, as enrollees who did not reconcile may have been eligible for the subsidy. However, it may include overpayments for enrollees who were not eligible for APTC.

A big problem with reconciling these Obamacare subsidies is when someone uses a Social Security number that doesn’t actually belong to the person getting the insurance. GAO’s early look at federal Marketplace data found more than 29,000 Social Security numbers in 2023 that showed over a full year of subsidized coverage. One number was used so many times that it totaled more than 26,000 days of insurance across more than 125 plans - the equivalent of more than 71 years of coverage tied to a single number.

The pattern continued in 2024, with nearly 66,000 Social Security numbers being linked to more than a year of subsidized coverage. This can result from identity theft, fake identities, or simple typing errors. According to the GAO, determining the true owner of a Social Security number can be complicated, so it’s examining these cases and other examples of overlapping coverage more closely.

CMS officials say the federal Marketplace lets people sign up even when a Social Security number is already in use. They claim this helps the real owner of the number get coverage in cases of identity theft or simple typing mistakes. The system uses a model that analyzes various pieces of personal information to distinguish applicants, and CMS runs this check monthly to clear out duplicate accounts. They also say applications with repeated Social Security numbers are supposed to go through a data-matching process in which people send in documents to verify their identities. However, even with those explanations, the setup makes it far too easy for fake applicants to slip through, and clearly, they do. The way the system works gives fraudsters plenty of room to abuse Social Security numbers long before anyone notices.

GAO notes that its “covert testing is illustrative and cannot be generalized to the enrollee population.”

This report lands in the middle of an active policy fight on Capitol Hill over whether to extend enhanced Obamacare subsidies, giving Republicans fresh evidence for their arguments about the program’s structural problem, validating their long-standing criticisms of Obamacare. House Ways and Means Chair Jason Smith (R-Mo.) called the report a “smoking gun” showing how a flawed system, protected by Democrat policies, has pushed tens of billions of taxpayer dollars to insurers through identity fraud. 

Energy and Commerce Chair Brett Guthrie (R-KY) argued that Democrats’ temporary expansion of subsidies worsened fraud, harmed patients, and hid deeper affordability problems. “Republicans have sounded the alarm on the flawed structural integrity of Obamacare and how Democrats’ failed policies to temporarily prop up the program have exacerbated fraud, hurt patients, increased the burden on American taxpayers, and artificially masked the true health care affordability crisis plaguing Americans today,” Guthrie said. “The concerning findings from GAO’s report further confirm that Republican efforts to strengthen, secure, and sustain our federal health programs are critical and necessary to ensure access to quality health care at prices Americans can afford.”

Tyler Durden Thu, 12/04/2025 - 19:40

The Problem With GDP

Authored by Alasdair Macleod via VonGreyerz.gold,

With signs of economic stagnation hard to ignore, politicians, economists, and even central bankers talk about the necessity for economic growth. Not only are they displaying economic ignorance, but by chasing something that is not a measure of production, they are bound to fail in their objectives.

The consequences for us all end in a crisis of reality. The errors of economic and monetary management by modern governments result in a credit crisis, which ultimately destroys their currencies. The signs that such a crisis is descending upon us are growing.

This article focuses on the delusions and destruction by macroeconomics: its principle objective is demonstrated to be an egregious error: to achieve economic growth. Being the sum of all recorded qualifying transactions over a period usually of a year, the measure of GDP is not of output, but of credit deployed in the economy. The error is to assume that all credit is deployed productively.

Credit recorded in GDP finances consumption, production (including investment), and government spending. Only credit for production and investment in it leads to price stability. But US industrial production is lower than in 2008, when on the Federal Reserve Bank of St Louis’s total index, it was 102.38 compared with 101.27 last:

Separately, FRED shows that industrial investment increased by a paltry $100 billion since 2008.

Credit expansion to finance production, particularly of goods, is non-inflationary because it is employed to make goods better, cheaper and more relevant to evolving consumer desires. And if credit funding goods production and investment have gone nowhere in the last seventeen years, then the increase in GDP is misleading.

Since 2008, GDP has more than doubled to about $30,000 billion. With the exception of service industries, many of which add little value, the expansion of credit funds, excess consumption and government spending. Credit expansion to finance the credit bubble is excluded from GDP, which is a separate issue.

It should now be clear that economists and politicians trumpeting growth are being misled or misleading themselves into promoting inflationary policies. The only offset is savings. If consumers save instead of spending, then consumer prices will not be driven up so much by excess credit. But here the US’s record over time is dismal:

Other than the spikes during the COVID lockdowns, when no one could spend, the long-term savings trend is down. Not only are savings down, but consumer debt is up:

Using 2008 as our base, consumer debt has doubled, while production of goods has stagnated. So not only has the personal savings rate generally declined, but the expansion of consumer debt has been a driving factor behind growth in GDP.

That leaves government spending. Governments are notoriously bad distributors of economic resources, and nowhere is this more so than reflected in GDP. Total US Government spending is about 40% of GDP, with the federal government portion being 23%. At least state and local governments’ spending is more relevant to their communities, but federal government spending is not, and that is where trouble is mounting from wasteful spending, all of which is included in GDP. 

The easiest way to grow GDP is for the federal government to increase its useless and economically destructive spending, which undoubtedly encourages the political class to do so.

The deflator myth

Starting with nominal GDP, econometricians point out that it should be deflated for inflation. If nominal GDP is shown to grow by 5%, than an inflation rate of 2% reduces that to real growth of 3%. The deflator usually used is the consumer price index.

The temptation to bolster real GDP growth by tinkering with the CPI is irresistible. Various methods are used to achieve this outcome. The result is that the current US inflation rate is calculated by the Bureau of Labour Statistics to be 3%, while John Williams of Shadowstats, who uses the original 1980 basis of calculation, computes it as 12%. Taking nominal GDP growth currently estimated by the Congressional Budget Office of 4.5%, this changes “real” GDP growth from 1.5% to minus 7.5%.

Imagine the furore if that was admitted! But we can’t even believe this more realistic presentation of the contraction of the value of total credit deployed in the economy (for that is what it is), because in theory there is a general level of prices, but in practice, no such thing exists. Its construction is therefore purely subjective and can say anything a government statistician wants. Hence, the difference between Shadowstats’ 1980 basis and subsequent revisions.

Consequently, the idea that GDP growth, nominal or real, represents the economic progress we all desire gets even further away from the truth. Instead, we can explain how the real economy is being suppressed by statistical misrepresentation, despite GDP headlines.

The debt trap

If there is one thing GDP is genuinely useful for, it gives a nation’s lenders a basis for judging its creditworthiness. Put simply, if national debt is growing faster than its tax base — roughly measured by the growth in GDP — then the economy is in a debt trap. However, if we are realistic about the distortions in the numbers, then many of the G7 nations are already there.

The reason that debt traps are yet to be properly recognised by markets is that they have been captured by governments themselves. The entire macroeconomic myth, coupled with regulatory oversight, have engendered complacency, which eventually will be shattered. 

It happened in Britain the last time it had a far-left government. In 1976, sterling began to fall, and the IMF were called in to stabilise government finances. Inflation the previous year had hit 25% and bond yields had soared to over 16%. The problem was that without the IMF forcing the UK government to cut spending and raise taxes to generate a budget surplus, the dynamics of the debt trap would have driven gilt yields higher still.

 An understanding that GDP represents credit and not economic progress, and that most of its deployment is inflationary, tells us that the dollar and other major currencies already face debt traps. That is why central bankers in the know are selling currencies and buying gold.

Conclusion

Investors should be aware that the government statistics upon which they rely for guidance are thoroughly misleading. Nowhere is this truer than in GDP, the quicksand upon which macroeconomics is built. Distortion of the facts compounds distortions of the past. This is why the entire basis of economic analysis is misleading and is bound to end up in a general economic and credit crisis when reality returns.

For this reason, individuals should follow the actions of central banks and protect themselves from a looming credit crisis. That can only be done by getting out of credit and into real money without counterparty risk, which is only physical gold.

Tyler Durden Thu, 12/04/2025 - 17:40

A Newsom Nihilist Nomination?

Authored by Victor Davis Hanson via American Greatness,

As California Governor Gavin Newsom gears up to run for president, what in the world will he run on?

Californians know that Newsom will not boast, “I will do for America what I have done to California!”

Why not?

Count the reasons.

California’s astronomical gas prices and taxes remain the highest in the continental U.S.

Ditto the state’s trifecta of the highest electricity rates, the costliest home prices, and the fourth-highest home insurance costs.

California has the largest unfunded liability debt in the nation, approaching $270 billion.

The budget deficit each year usually ranges from $15 to $70 billion.

Such profligate spending and deficits explain why the state also has the highest income taxes and state sales tax rates in the nation.

Just 1% of California households pay 50% of the state income tax. And the fleeced are leaving in droves.

Newsom recently boasted that he extended Medi-Cal health insurance to thousands more illegal aliens.

So, no wonder Newsom next begged for a nearly $3 billion Medi-Cal federal bailout.

Half of the state’s 41 million residents are now on Medi-Cal. Some 50 percent of all births are Medi-Cal-provided—and growing.

California has a lot of other firsts among the 50 states:

• The largest population of illegal aliens.

• The largest number of homeless people.

• The largest number of people fleeing a state.

• The largest number (11 million) and percentage (27%) of foreign-born residents.

• The largest number of people living in poverty.

• The highest food prices in the continental U.S.

• The state’s infrastructure is usually rated near the bottom.

• California ranks among the five worst states in per capita violent crime.

Here are a few other observations about the current disaster that is Newsom’s California.

One, California is a naturally wealthy state. It is the third largest by area. It ranks seventh in the nation in oil reserves. No nation has more agricultural production or forested land acreage. So it’s hard to bankrupt California, but Newsom has managed.

Two, under prior governors Pat Brown, Ronald Reagan, George Deukmejian, and Pete Wilson, California used to be the best-run state in the country.

California once produced more oil than any other state except Texas.

Its now-moribund timber industry once used to be the third largest in the nation.

And its currently ossified mining and mineral industries were once among the top ten producers in the country.

Three, no state politician over the last three decades has been more responsible for California’s decline than Gavin Newsom: six years as governor, eight years as lieutenant governor, seven years as mayor of San Francisco, and seven years on the San Francisco Board of Supervisors.

Four, California chose decline. In the last thirty years, it drove out somewhere between 18 and 20 million affluent and middle-class state residents, the largest state exodus in U.S. history.

Its open border welcomed in an influx of over 10 million illegal aliens.

Meanwhile, Silicon Valley’s $11 trillion in market capitalization created the wealthiest and the most left-wing out-of-touch elite in the United States.

The result was a medieval state of a few million elites, a mass of poor people, and a vanishing middle class.

Five, such influxes and exoduses, along with gerrymandering, have ensured a one-party state. There are no Republican statewide officeholders.

Democrats control all branches of government. Only 17% of its congressional delegation is Republican. So the Left proudly owns what California has become.

What, then, will Newsom run on?

• Certainly not high-speed rail—17 years, $15 billion, and not a foot of track laid.

• Certainly not a $500-million exploding solar battery plant.

• Certainly not illegally issuing 17,000 commercial truck driver’s licenses to non-resident illegal aliens with little or no English competency.

• Certainly not the horrific but preventable Pacific Palisades fire.

• And certainly not a now-closed $2-billion desert solar plant boondoggle.

Instead, Newsom will continue his he-man threats to Trump, like, “We’re going to punch this bully in the mouth.”

But will such bluster lower the state’s gas and power prices or reduce its sky-high taxes?

On social media and in podcasts, Newsom will continue his adolescent threats to federal officials like Secretary of Homeland Security Kristi Noem while serving up his adolescent potty-mouth smears (e.g., “son of a b***h,” “god-d**n,” “f**k,” etc.).

But that profanity will not lower crime or house prices.

In other words, in the Democrat primaries, Newsom will try to out-crazy the violence, profanity, and extremism of the now-crazy Democrat socialists.

Newsom will rant nonstop about the evil Trump, but neither offer a word nor do a thing about his own responsibility for the collapse of a once great state.

Newsom will lecture on “affordability” without mentioning that he has created the most unaffordable state in the nation.

Will all this gobbledygook work?

It did in New York.

So, who knows?

Tyler Durden Thu, 12/04/2025 - 17:00

Connecticut Orders Robinhood, Crypto.com, & Kalshi To Stop Prediction Markets

Connecticut’s Department of Consumer Protection issued cease-and-desist orders to Kalshi, Robinhood and Crypto.com, alleging that the platforms are conducting unlicensed online gambling there.

“Only licensed entities may offer sports wagering in the state of Connecticut,” DCP commissioner Bryan T. Cafferelli said in a statement on Wednesday.

“None of these entities possess a license to offer wagering in our state, and even if they did, their contacts violate numerous other state laws and policies, including offering wagers to individuals under the age of 21.”

DCP Gaming Director Kris Gilman accused the platforms of “deceptively advertising that their services are legal,” adding that they operate outside of the state’s regulatory environment, “posing a serious risk to consumers who may not realize that wagers placed on these illegal platforms offer no protections for their money or information.”

As CoinTelegraph's Martin Young details below, prediction markets have come under legal scrutiny in several US states, as the use of these platforms has skyrocketed this year and attracted billions of dollars in investment for allowing users to bet on the outcome of a variety of events.

Prediction markets saw huge volumes in November. Source: Token Terminal 

Kalshi fires back in court

A Kalshi spokesperson told Cointelegraph that it is “a regulated, nationwide exchange for real-world events, and it is subject to exclusive federal jurisdiction.

“It’s very different from what state-regulated sportsbooks and casinos offer their customers. We are confident in our legal arguments and have filed suit in federal court,” Kalshi added.

In a complaint filed on Wednesday against the DCP, Kalshi claimed that “Connecticut’s attempt to regulate Kalshi intrudes upon the federal regulatory framework that Congress established for regulating derivatives on designated exchanges.”

[ZH: Kalshi is perhaps the most exposed in this suit given their massive push into sports predictions...]

It added that its platform was subject to the Commodity Futures Trading Commission’s “exclusive jurisdiction” and its sports event contracts “are lawful under federal law.”

“As we’ve previously shared, Robinhood’s event contracts are federally regulated by the CFTC and offered through Robinhood Derivatives, LLC, a CFTC-registered entity, allowing retail customers to access prediction markets in a safe, compliant, and regulated manner,” a Robinhood spokesperson told Cointelegraph.

Crypto.com did not immediately respond to requests for comment.

In its statement, Connecticut’s DCP said that prediction market platforms pose serious risks to consumers because they lack the required technical standards and security protections for financial and personal data.

Source: Connecticut Department of Consumer Protection

The agency claimed that such platforms also lack integrity controls to prevent insider betting or manipulation, operate without regulatory oversight of their payout rules, advertise to self-excluded gamblers and on college campuses, and permit betting on events with known outcomes, thereby giving insiders unfair advantages.

Only three platforms are legally licensed for sports wagering in Connecticut: DraftKings, FanDuel and Fanatics, all of which require users to be at least 21 years old.

Kalshi under fire in at least 10 US states

Connecticut is not the only state to take a hard stance on prediction platforms; regulators in two neighboring states have previously taken action. 

New York sent a cease and desist to Kalshi in late October, and the company responded on Oct. 27 by suing the state. Meanwhile, the Massachusetts state attorney general sued Kalshi in the state court in September. 

Kalshi also previously received cease and desist orders from Arizona, Illinois, Montana and Ohio this year, and it remains embroiled in ongoing litigation in New Jersey, Maryland and Nevada, reported Bookies.

Kalshi announced this week that it has closed a $1 billion funding round at a valuation of $11 billion, after seeing its best-ever monthly volume in November.

Tyler Durden Thu, 12/04/2025 - 16:40