Taxpayers will foot the bill for up to $25 billion in improper Obamacare payments due to organized fraud and improper enrollments in 2026, according to a June 3 report from Paragon Health Institute.
Some 6.2 million enrollments in the healthcare exchanges during the most recent open-enrollment period were improper, the report said, accounting for 27 percent of all enrollments.
The conservative think tank has studied fraud in the Obamacare program since 2024.
The problem of improper enrollments persists despite recent attempts to curtail it, and appears to involve organized efforts by unscrupulous insurance brokers, the report concluded.
Meanwhile, some industry groups have criticized the findings.
Incentives For Fraud
Obamacare’s premium subsidies, which cover 100 percent of the health coverage policy for many beneficiaries, and referral bonuses offer an incentive for both enrollees and brokers to abuse the system, the report concluded.
Researchers identified improper enrollments by comparing Obamacare data to Census Bureau population estimates. The improper enrollments were calculated by a state-by-state comparison of enrollments in the lowest income category to the number of people having that income level in the state.
The lowest income category is 100 percent to 150 percent of the federal poverty level, or about $16,000 to $24,000 per year for an individual or about $27,000 to $41,000 for a family of three.
Enrollees with incomes at that level receive the highest subsidies. During the 2026 open enrollment period, 29 percent of enrollees chose a plan with a $0 premium.
That gives enrollees and the agents who sign people up for Obamacare an incentive to misstate their income, the report concluded.
The American Hospital Association has said Paragon’s research results are not valid due to flawed methodology. “The Census uses different income and household size definitions than the Marketplace so there is no possibility of the data matching,” the group said in an August 2025 statement. The association also said the Census relies on reported income but Obamacare asks for projected income.
The total value of Obamacare subsidies to be paid in 2026 is $88 billion, according to the Congressional Budget Office.
Agents who enroll individuals or families in Obamacare earn a commission averaging around $20 per enrollee per month for as long as the policy is active.
Obamacare received more than 23 million enrollments during the 2026 open enrollment period.
Hellbound and Down 