Paragon Health Institute: Affordable Care Act Rife with Fraud and Improper Enrollment

New findings from GAO and years of Paragon research highlight systemic failures with ACA

WASHINGTON, Dec. 17, 2025 /PRNewswire/ -- The Paragon Health Institute, a leader in health care research and market-based policy proposals, has published multiple studies exposing deep structural flaws in the Affordable Care Act (ACA), including widespread fraud. Paragon's research has documented millions of improper and phantom enrollees in the exchanges. The organization's analysis has highlighted the drivers of escalating premiums and taxpayer costs as well as the bias against workers who receive health insurance through their employers, which leads many small businesses to drop coverage.

"The recent votes in the Senate show that Democrats and Republicans agree that the Affordable Care Act has failed to deliver on its core promise to make health coverage more affordable," said Brian Blase, president of Paragon. "As the debate continues, it is critical to hold the line—as President Trump has repeatedly stated—against sending even more taxpayer money to giant health insurance companies."

"There is a staggering amount of fraud in the ACA that must be addressed to protect eligible enrollees and taxpayers," Blase added.

On December 10, Paragon president Brian Blase testified alongside the Government Accountability Office (GAO) at a House Judiciary Committee hearing exploring fraud in the exchanges. GAO testified about their new report showing that the exchanges approved 96 percent of fictitious applications for subsidized coverage. GAO also found that $21 billion that taxpayers sent to health insurers as subsidy payments in 2023 has not been properly accounted for and that 68,000 Social Security numbers were enrolled in plans for more than 366 days in 2024.

The Congressional Budget Office (CBO) also validated the significant fraud in the exchanges. CBO estimates that there are 2.3 million ineligible enrollees in the exchanges just for enrollees who overestimated their income in the ten states that did not expand their Medicaid programs under the ACA.

Beginning in June 2024, Paragon began publishing research documenting the incentives that encourage cheating by insurers, unscrupulous agents and brokers, and enrollees. In 2024, there were 5.0 million ineligible enrollees in fully subsidized plans. A follow-up report found that the problem got worse after the last open enrollment period under President Biden's watch, with 6.4 million improperly-enrolled individuals in 2025 and with improper spending reaching $27 billion this year.

In August 2025, the Centers for Medicare and Medicaid Services released data showing a surge in exchange enrollees who never used their health plan—35 percent of all enrollees in 2024 and 40 percent of fully subsidized enrollees—a percentage double the amount before the Biden COVID bonus subsidies. Insurers received $35 billion in 2024 for exchange enrollees who never used their plan.

Federal oversight agencies and investigative journalists have increasingly documented large-scale waste, fraud, and abuse in government health programs. The findings echo shocking stories of fraud in states including Minnesota, Florida, and Maine, where journalists and whistleblowers have exposed problems predicted by Paragon analyses.

Additional background and analysis:

• Paragon Prognosis: GAO Probe Finds ACA at High Risk for Fraud: 96% of Fake Applications Approved
• The Greater Obamacare Enrollment Fraud 
• Nine Affordability Ideas for health care from the written testimony of Brian Blase before the Senate Finance Hearing on Obamacare
• Oral testimony from Brian Blase before the House Judiciary Committee (on ACA fraud)
• Paragon Prognosis: Health Care Freedom for Patients Act of 2025 (Crapo-Cassidy bill)
• Paragon Prognosis: Lower Health Care Premiums for All Americans Act (House bill)

About Paragon Health Institute

Launched in late 2021 by Brian Blase, Paragon Health Institute provides health policy research as well as market-based policy proposals for improved outcomes in the public and private sectors. A 501(c)(3) non-profit, the organization is funded by donations from foundations and individuals. Paragon does not accept any funding from industry and does not conduct any lobbying. Journalists and health care analysts can review Paragon's latest studies and commentary at paragoninstitute.org.

Contact:
Anthony Wojtkowiak
[email protected]
703.527.2734

SOURCE Paragon Health Institute