Improper ACA Enrollment Costs Taxpayers Billions, Paragon Report Finds

A new study by Paragon Health Institute reveals that 14.3 million people—about 34% of all ACA participants—were improperly enrolled in either the health-insurance exchanges or Medicaid expansion during 2024. This mis-enrollment is estimated to have cost the federal government roughly $65 billion, or 24% of total ACA subsidy spending for that year. The report also highlights a 26% increase in improper exchange enrollment between 2024 and 2025, climbing to an estimated 6.5 million enrollees.

State-level data show the problem manifests differently, with expansion states seeing most errors in Medicaid and non-expansion states in exchange subsidies. Paragon argues that the current design, which rewards enrollment without strong eligibility checks, drives these costly errors. The institute calls for policy changes to realign incentives and curb improper enrollment across both programs.