Staff Reports
A new analysis from the Paragon Health Institute landed like a cannonball in the middle of the Obamacare debate: the group says improper enrollment in the Affordable Care Act marketplaces and Medicaid expansion cost taxpayers about $65 billion in one year. That’s a headline number big enough to make even casual voters sit up, and Paragon backs it with a detailed methodology, corroborating watchdog reports, and a warning that the problem is growing — not shrinking.
Paragon finds $65 billion tied to improper enrollment
Paragon’s report estimates roughly 14.3 million people were improperly enrolled across the ACA exchange and Medicaid expansion in 2024 — about one‑third of all enrollees — and translates that into roughly $65 billion in federal spending. They also say improper exchange enrollment rose sharply from 2024 to 2025 and project continued problems into 2026, with separate Paragon work estimating millions more questionable sign‑ups and billions more in improper subsidies. The group points to easy zero‑premium plans, lax identity and income verification in some enrollment pathways, automatic re‑enrollment rules, and broker incentives as the mechanics driving the alleged abuse.
How Paragon reached the $65 billion number — and the caveats
Paragon’s method combines public Marketplace enrollment counts with Census‑based eligibility estimates and treats excess sign‑ups beyond that eligible pool as improper. They publish sensitivity ranges and a methodology appendix, but the final dollar figure still rests on a chain of assumptions: how you count eligible people, how you treat partial‑year enrollees, and whether low claims mean “phantom” coverage or just healthy, low‑use members. To be fair, recent GAO work has independently documented marketplace vulnerabilities and risky practices by agents and brokers, and CMS has moved to tighten rules and verification. Still, GAO didn’t hand anyone a $65 billion invoice — that number is Paragon’s estimate built on reasonable but debatable assumptions.
Why this matters: premiums, taxpayers, and politics
Why should anyone care? Because program integrity isn’t bookkeeping — it affects premiums and taxes. Independent analysts have flagged steep premium increases coming in the market, and lawmakers on the right — including Speaker Mike Johnson — are already using studies like Paragon’s to argue the ACA is making care less affordable. If millions of ineligible people are drawing huge subsidies, that money has to come from somewhere: either higher taxpayer bills or higher premiums for middle‑class families who don’t qualify for subsidies. That reality should unite common sense across the aisle, but don’t hold your breath.
Fixes conservatives should demand — and Democrats should explain
Paragon’s findings are a call to action. Conservatives should push for tighter identity and income verification, stronger controls on Enhanced Direct Enrollment pathways, tougher oversight of brokers and navigators, limits on automatic reenrollment, and stepped‑up audits that recover improper payments. CMS has begun rule changes — good — but regulators and Congress need to finish the job. Democrats who defend the current system owe voters an explanation for why lax rules that reward sign‑ups are preferable to protecting taxpayer dollars and holding the line on premiums. If Obamacare’s defenders want to call it “affordable,” they need to show how they’ll stop bloodletting dollars out of the system. Otherwise, expect more reports, more outrage, and more money wasted — on a program that promises affordability and delivers complexity and cost instead.
