Paragon Estimates $65 Billion in 2024 ACA Improper Payments from 14.3 Million Ineligible Enrollees

The report compared CMS enrollment files against Census income distributions and Social Security death records, identifying 9 million likely ineligible Medicaid expansion cases and 5.3 million Marketplace cases. Enrollment exceeded eligible populations in 28 states. GAO separately confirmed that 18 of 20 fabricated identities using unissued SSNs remained active into 2025, generating over $10,000 monthly in subsidies. These figures reflect documented program rules rather than enforcement outcomes.

States gain automatic federal matching funds for each additional expansion enrollee while facing no direct repayment risk for over-enrollment. Insurers receive fixed per-member premiums regardless of claim activity. The federal government bears the full subsidy cost but lacks real-time income or identity verification at scale. This structure creates persistent upward pressure on reported enrollment.

GAO testing and death-record matches establish concrete instances of fictitious or deceased beneficiaries receiving payments. Counter-claims from state marketplaces and CBPP note survey income volatility but do not address the GAO identity tests or state-level enrollment-to-eligible ratios. The 26 percent rise in improper Marketplace cases from 2024 to 2025 indicates the pattern is not self-correcting under current verification.

CMS has signaled enhanced data cross-checks beginning in 2026 open enrollment. Any sustained reduction will require states to absorb repayment liability or face reduced federal match rates, altering the current incentive alignment.