A $5.7 billion startup wants AI to cut government benefit fraud. Experts aren't sold yet.
Business Insider
February 25, 2026
AI-Generated Deep Dive Summary
A $5.7 billion startup named Checkr is aiming to revolutionize government identity verification by leveraging AI to reduce fraud and waste in programs like Medicare and Social Security. CEO Daniel Yanisse claims this could streamline benefits eligibility, though AI experts warn of significant legal and technical challenges. Stuart Russell, a renowned AI researcher, notes that AI systems lack the ability to provide verifiable explanations for their decisions, complicating their use in high-stakes government applications.
Checkr, based in San Francisco, currently uses AI to conduct background checks for major clients like Uber and Lyft, valuing over $5.7 billion post-2022 funding. The company aims to expand into verifying benefits eligibility, a sector plagued by fraud and inefficiencies. For instance, Medicare alone faced $28.83 billion in improper payments in 2025, underscoring the need for better verification methods.
However, past attempts at automating welfare systems have led to significant issues. In Indiana, an AI-driven project with IBM resulted in flawed benefit denials and legal disputes. Similarly, Australia’s Robodebt system erroneously targeted recipients, causing harm and even suicides. These cases highlight the risks of relying on AI for sensitive government functions without proper safeguards.
AI experts stress the importance of thorough testing and independent oversight before implementing such systems. Baobao Zhang suggests that governments must establish advisory councils and conduct real-world evaluations to mitigate potential harms. If successful, Checkr’s approach could enhance efficiency while addressing critical fraud issues in welfare programs.
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Originally published on Business Insider on 2/25/2026