A Paragon Health Institute report estimates that taxpayers spent $65 billion in 2024 on Affordable Care Act and Medicaid expansion coverage for 14.3 million people who were allegedly ineligible, duplicated or improperly enrolled, though critics dispute the scope of the findings.
By yourNEWS Media Newsroom
Taxpayers spent an estimated $65 billion in 2024 providing health coverage through Obamacare and Medicaid expansion to people who either did not qualify, were enrolled more than once or may not have existed, according to a new report from the Paragon Health Institute.
The Aug. 26 report concluded that the two Affordable Care Act programs improperly enrolled a combined 14.3 million people during the year.
Researchers estimated that roughly 34 percent of all Marketplace enrollees in 2024 were fraudulent, duplicated or otherwise did not satisfy program eligibility requirements.
Paragon said the problem grew further in 2025.
“Improper exchange enrollment increased by more than 26 percent from 2024 to 2025—up to an estimated 6.5 million enrollees,” the report stated.
Medicaid expansion permits participating states to cover people earning as much as 138 percent of the federal poverty level, compared with a limit of 100 percent under traditional Medicaid.
For a family of three, the expansion threshold was approximately $35,600 in 2024.
Obamacare coverage at the time was available to people earning as much as 400 percent of the federal poverty level, or about $103,000 for a family of three.
Both programs operate through the Affordable Care Act framework, with commercial insurers providing coverage through the Marketplace.
Paragon researchers examined federal survey, enrollment and spending data and concluded that more than 9 million people enrolled in Medicaid expansion in 2024 likely did not qualify.
According to the report, those enrollees may have earned too much, failed to meet citizenship, immigration or residency requirements, or instead qualified for traditional Medicaid.
The report also focused heavily on alleged fraud involving Obamacare policies carrying $0 premiums, which became more widely available during the post-COVID period.
Paragon President Brian Blase told Congress in December that some people were enrolled in plans without their knowledge by insurance brokers seeking commission payments.
Under that scenario, the federal government would send premium subsidies to an insurer while the broker collected a commission, even though the person whose name appeared on the policy may not have knowingly sought coverage.
Blase said investigators can sometimes identify what he described as phantom enrollments because the accounts show little or no activity after coverage begins.
Paragon also reported that 28 states had more people enrolled in Obamacare than the number of state residents who appeared to meet the applicable income qualifications.
The institute’s conclusions have drawn skepticism from health-policy organizations and insurers.
Covered California, the state’s health insurance marketplace, rejected the broader assertion that fraud is widespread across state-run exchanges.
“There is no evidence of systemic fraud, waste, or abuse in [state-based marketplaces],” Covered California said.
America’s Health Insurance Plans also disputed the idea that a year without insurance claims necessarily indicates that an enrollee is illegitimate.
“A ‘no-claims’ year is evidence that a consumer stayed healthy or only had a few months of coverage—not that taxpayer money was misdirected or that their policy was illegitimate,” the organization said in a 2025 statement.
The Center on Budget and Policy Priorities has also questioned Paragon’s methodology, particularly its use of income information in estimating Medicaid eligibility.
“There are a number of reasons why people who report incomes somewhat above 138 percent of the poverty line in a survey may be eligible for the Medicaid expansion,” the organization said in response to an earlier Paragon analysis.
Paragon had previously published estimates concerning improper enrollment, but the new report adds a calculation of the taxpayer cost.
Separate federal investigations have nevertheless documented specific cases of fraudulent and improper enrollment.
In December 2025, the Government Accountability Office reported that investigators successfully enrolled 20 nonexistent identities in Obamacare during 2024.
The investigators used Social Security numbers that had never been issued and other counterfeit documents that were relatively easy to create.
Of those 20 false enrollments, 18 remained active as of September 2025.
Together, the policies were costing taxpayers more than $10,000 per month.
GAO investigators also identified 26,000 accounts that received subsidies in 2023 using Social Security numbers that matched individuals listed in the Social Security Administration’s death records.
The false enrollments uncovered during the investigation resulted in more than $94 million in taxpayer-funded subsidies over one year.
Federal agencies have taken additional steps during the past two years to remove questionable enrollments and prevent new ones.
Those actions have included suspending insurance agents and brokers suspected of fraud, restoring data matching between federal programs to identify duplicate enrollment, eliminating phantom policies and requiring Medicaid eligibility to be recertified every six months.
The Centers for Medicare and Medicaid Services reported in January that it had removed more than 1 million people who were simultaneously enrolled in Obamacare and Medicaid or the Children’s Health Insurance Program, or who failed to file and reconcile subsidies they had previously received.
Another 250,000 people were removed after officials determined they had been enrolled without their consent.
According to a government statement, those measures generated approximately $10 billion in annual savings.
The new Paragon report argues that substantially more improper enrollment remains in the system, estimating the total 2024 taxpayer cost at $65 billion.
Critics maintain that the institute’s methodology may classify some legitimate enrollees as improper, particularly when eligibility is inferred from survey data or lack of insurance claims.
The report therefore adds to an ongoing dispute over the scale of fraud, duplication and mistaken enrollment within Obamacare and Medicaid expansion, even as federal investigations have independently documented thousands of improper accounts and the government continues removing people it determines should not be receiving subsidized coverage.
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