Twenty fake identities walked into the Obamacare marketplace in 2024 as part of a Government Accountability Office test. By September 2025, 18 of them were still enrolled and actively receiving subsidies — at a cost of roughly $10,000 per month each. Nobody flagged them. Nobody stopped them. The system just kept paying.
A report released August 26 by the Paragon Health Institute puts the total damage at $65 billion in taxpayer money lost to improper Obamacare enrollments in 2024 alone. The study found 14.3 million people were improperly enrolled across both the ACA marketplace and Medicaid expansion — meaning 34% of all marketplace enrollees were either fraudulent, duplicated, or flat-out unqualified for the coverage they were receiving.
Brian Blase, president of Paragon Health Institute and the report's lead author, testified before Congress in December 2025 that "many people were enrolled in the program without their knowledge by unscrupulous insurance brokers." That's not a typo. People who never signed up for Obamacare were enrolled anyway — by brokers collecting commissions on phantom customers.
The Medicaid side is arguably worse. Nine million Medicaid expansion enrollees in 2024 didn't qualify for the program — people earning above the $35,600 income limit for a family of three who were approved anyway. The ACA marketplace threshold is $103,000 for the same family size, and 28 states had enrollment numbers that exceeded any reasonable estimate of their eligible populations.
By 2025, improper enrollment had increased another 26%, climbing to 6.5 million marketplace enrollees alone. The Centers for Medicare and Medicaid Services acknowledged the problem in a January 2026 report, noting it had removed 1 million enrollees — including 250,000 who had been signed up without their consent. CMS estimated the removals would save $10 billion annually.
Covered California — the state's marketplace — responded that "there is no evidence of systemic fraud, waste, or abuse in state-based marketplaces." The GAO's own undercover test found 18 out of 20 fake enrollments survived for over a year. The insurance industry's trade group, America's Health Insurance Plans, offered that "a 'no-claims' year is evidence that a consumer stayed healthy or only had a few months of coverage." A no-claims year on a fake identity is evidence of something, but health isn't it.
The GAO also discovered 26,000 active accounts receiving subsidies under Social Security numbers belonging to deceased individuals. The tab for just those accounts ran to $94 million in a single year — 2023.
This is the program that was supposed to be too important to repeal. The Affordable Care Act, we were told, was the moral architecture of a civilized society. Thirteen years in, it has become the largest automated payment system for people who don't exist, didn't sign up, or don't qualify — and the agencies running it can't tell the difference.
Steal from the program. Collect commissions on the enrollment. The program gets bigger. More to steal.
That's not a coverage gap. That's a business model.