Obamacare Enrollment Fraud More Expensive and More Widespread in 2025

The cost of improper enrollments is expected to reach $27B just this year

WASHINGTON, June 17, 2025 /PRNewswire/ -- Paragon Health Institute, a leader in healthcare research and market-based policy, has uncovered growing enrollment fraud in the Affordable Care Act ("Obamacare"). From 2024 to 2025, the number of ineligible enrollees rose by more than 25 percent to 6.4 million.

Paragon's newest report, The Greater Obamacare Enrollment Fraud, describes how applicants, brokers, and insurers are incentivized to misstate income to profit from fully subsidized Obamacare plans.

Enrollees who claim income between 100 and 150 percent of the federal poverty level (FPL) receive fully subsidized plans. Last year, Paragon reported that about 5 million people were improperly enrolled in this income band.

Using the same methodology as our original 2024 investigation, Paragon now estimates 6.4 million enrollees claimed income between 100 and 150 percent of FPL during 2025 open enrollment but did not actually earn that income. This increase means that the taxpayer cost of Obamacare enrollment fraud will rise to at least $27 billion in 2025 alone. In 15 states—Arizona, Florida, Georgia, Indiana, Louisiana, Michigan, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, and Utah—there are more than twice as many enrollees as eligible individuals. 

Paragon's updated report, The Greater Obamacare Enrollment Fraud, shows how the Biden administration's policies to prioritize enrollment over program integrity—along with lax eligibility verification, automatic re-enrollment, enhanced subsidies, and subsidy recapture limits — all incentivize pervasive enrollment fraud. The paper compares reported enrollee income to actual likely eligibility in each state.

Paragon's latest research explains how individuals, brokers, and insurers misestimate income to qualify for larger subsidies. Insurers' earnings benefit from higher enrollment and subsidies, and brokers earn larger commissions. As a result, millions of enrollees appear to be enrolled without their knowledge, already have other coverage, or are unaware they remain enrolled. Third-party brokers take advantage of the insufficient guardrails in HealthCare.gov's direct enrollment system to sign people up with minimal information — just a name and a birthdate — without interacting with the exchange or even the consumer.

Here are some key statistics showing the problem:

• Nearly 11 million people (45 percent of all exchange enrollees) were automatically re-enrolled in 2025—an increase of 65 percent since 2024 — allowing improper enrollees to stay on the program year after year.
• Among enrollees who reported income between 100–150 percent of FPL in HealthCare.gov states, an estimated 62.3 percent are not actually eligible.
• In 29 states, more people reported income in the 100–150 percent FPL band than are likely eligible.

For the full investigation of recent Obamacare enrollment fraud as well as its manifestation in Medicaid expansion states vs non-expansion states, see The Greater Obamacare Enrollment Fraud.

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 healthcare analysts can review Paragon's latest studies and commentary at paragoninstitute.org/research/.

Contact:
Anthony Wojtkowiak
[email protected]
703.527.2734

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SOURCE Paragon Health Institute