In a series of YouTube ads viewed more than 195 million times, a red-lipped Taylor Swift tells viewers about a “new thing” in Florida: Just visit a website, answer two questions and the state will send you a $6,400 stimulus check.

Sound too good to be true? It was — and the narrator wasn’t Swift but an AI deepfake. The ads, since taken down, were part of an elaborate scheme to fraudulently enroll people in Obamacare.

For years, insurance brokers have exploited lax controls on HealthCare.gov, the federal website for Affordable Care Act plans, to boost their commissions. Yet complaints of improper and fraudulent enrollment have surged since the pandemic. Although the scale is hard to quantify, one (much contested) estimate suggests as many as 6 million enrollees are ineligible.

Republicans cited such figures when they let COVID-era subsidies lapse in December, and experts agree that fraud is real and costly. Millions of well-meaning Americans nevertheless could become uninsured without the credits. For many, bigger health-insurance bills have already started accumulating. Although Congress has been scrambling in recent weeks to negotiate a deal that would restore the subsidies, prospects look grim. If any compromise does emerge, it should also involve a more aggressive approach to tackling fraud.

In the best of times, ACA enrollment is unusually error-prone. The size of the tax credit is determined by income, with lower earners eligible for bigger subsidies. The law thus requires consumers to estimate their future earnings. Credits are then “reconciled” at tax time. If an enrollee lowballs their income and gets a larger subsidy than earned, they must repay the difference to the Internal Revenue Service. (Last year’s budget-reconciliation bill removed repayment caps.)

This design creates two problems. First, the ACA’s target population — the self-employed, gig workers and so on — has unsteady income. Many earn poverty-level wages and bounce between eligibility for Medicaid and Obamacare. Estimating earnings with reasonable accuracy is challenging, to say the least.

Second, ACA subsidies are designed as “advance” tax credits, meaning they’re paid directly to insurers. Enrollees who misestimate their income don’t get extra cash. Rather, insurers get paid more generously than they should, while brokers pocket their commissions. Consumers bear the consequences.

It isn’t hard to see how unscrupulous brokers exploit this situation. In many states, enrollment requires only a name, Social Security number and address — data easily culled from fake ads like the ones in Florida, unsolicited calls or other deceptive means. A recent report by the Government Accountability Office found that a third of tax credits paid on behalf of enrollees with a Social Security number couldn’t be reconciled with IRS data. Likely among these mystery beneficiaries are hundreds of improperly enrolled homeless and almost 60,000 dead people. Health officials, for their part, logged 275,000 complaints of unauthorized enrollments and plan changes in the first eight months of 2024 alone.

Distinguishing between improper payments and fraud is difficult for any government program. When it comes to the ACA, however, basic IT safeguards have been ignored for years. Two-factor authentication, for example, is standard on many state marketplaces and should’ve been implemented on HealthCare.gov long ago. And while last year’s budget bill tightened eligibility checks, the goal should’ve been stopping bad behavior, not penalizing consumers.

To that end, regulators need to be more diligent in rooting out scams. In 2024, some 850 brokers were suspended for “reasonable suspicion” of fraud, yet many were reinstated the following year with little evidence they’d improved their practices. Too few criminal investigations have taken place. At a minimum, brokers and insurers found to have acted in bad faith should be banned from marketplaces and subject to clawbacks. More regular audits are also needed.

Flawed oversight has left a critical health program vulnerable to scammers while taxpayers foot the bill. American health care has many intractable problems; this shouldn’t be one of them.

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