Paragon Report Estimates $65 Billion in Improper ACA Spending for 2024, Backed by GAO Findings on Enrollment Vulnerabilities

A new analysis from the Paragon Health Institute estimates that improper enrollment in the ACA's Medicaid expansion and Marketplace subsidies cost the federal government approximately $65 billion in 2024, involving an estimated 14.3 million ineligible enrollees—about 34% of total participants in those programs. The report, released August 26, 2026, combines findings on over-enrollment in expansion Medicaid (roughly 9.2 million likely ineligible) with exchange subsidy issues, attributing much of the problem to weak eligibility verification, zero-premium plans, and broker incentives.[1][2]

Corroborating evidence comes from the U.S. Government Accountability Office (GAO). A December 2025 GAO report detailed covert testing where investigators successfully enrolled 20 fictitious identities in the federal Marketplace for plan years 2024-2025 using unissued Social Security numbers and fake documents. Of these, 18 remained active into September 2025, generating over $10,000 monthly in subsidies. The GAO also identified tens of thousands of SSNs tied to deceased individuals or overused for multiple enrollments, with vulnerabilities persisting despite prior warnings.[3][4]

Paragon's methodology compares state-level enrollment data against Census estimates of eligible populations by income, highlighting disproportionate issues in certain states and HealthCare.gov-using markets. Independent coverage in outlets like The Epoch Times, Daily Caller, and Politico has amplified these findings, noting links to post-COVID subsidy expansions and enforcement gaps.[5][6]

Critics, including the American Hospital Association, argue that Paragon's approach relies on imperfect Census data mismatches and overinterprets zero-claim years as fraud, emphasizing that legitimate low utilization occurs across insurance markets. The Center on Budget and Policy Priorities has raised similar methodological concerns in prior critiques.[7]

Broader context reveals ongoing federal actions, including CMS suspensions of agents for suspected fraud and DOJ convictions involving large-scale improper subsidies. The issue ties into wider debates on ACA integrity, with improper enrollment concentrated in expansion states like California and affecting both program trust and fiscal sustainability amid reform discussions.