A new report suggests that fraud and improper enrollments in Obamacare may be costing taxpayers billions of dollars each year. Researchers say weak verification systems and incentives built into the program have allowed questionable enrollments to persist despite recent reforms.

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From The Epoch Times:

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.

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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.

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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.

The findings come from a June 3 report by the Paragon Health Institute, a conservative think tank that has studied fraud and abuse within the Affordable Care Act marketplace since 2024. According to the report, taxpayers could be responsible for as much as $25 billion in improper payments in 2026 alone. Researchers reached their conclusions by comparing Obamacare enrollment data with Census Bureau estimates of individuals who fall within the income brackets that receive the largest subsidies.

At the center of the concern is the structure of Obamacare subsidies. Individuals earning between 100% and 150% of the federal poverty level qualify for the most generous assistance, and many can obtain health coverage with no monthly premium. During the 2026 enrollment period, nearly one-third of enrollees selected plans with a $0 premium. Researchers argue this creates a powerful incentive for applicants to understate their income and for brokers to maximize enrollments, regardless of eligibility.

The report also points to automatic re-enrollment as a major factor. Nearly 40% of exchange participants were automatically renewed for coverage in 2026, allowing questionable enrollments to carry over year after year. While Congress has approved annual income verification requirements and the Trump administration implemented stricter verification rules earlier this year, many of those reforms will not take full effect until future enrollment cycles.

Paragon additionally raised concerns about “phantom enrollments”—individuals who are either fictitious, unaware they have been enrolled, or already covered by another insurance plan. The report notes that 35% of Obamacare enrollees in 2024 filed no medical claims and that roughly half of enrollees in 2026 reported an unknown race or ethnicity. Researchers suggest these trends may indicate limited contact between brokers and enrollees and potentially fraudulent activity.

Industry groups have pushed back on Paragon’s conclusions. The American Hospital Association and America’s Health Insurance Plans have argued that the report relies on flawed assumptions and that a lack of medical claims does not prove fraud. They contend that healthy individuals often maintain coverage without using it and that Census data is not directly comparable to Obamacare enrollment data.

Whether all of Paragon’s estimates prove accurate or not, the report highlights ongoing concerns about stewardship of taxpayer dollars and the effectiveness of government oversight. As Congress and the administration continue implementing new safeguards, many Americans will be watching to see whether those reforms can reduce waste, fraud, and abuse in one of the federal government’s largest healthcare programs.

What do you think should be done to prevent fraud and protect taxpayer dollars? Share your thoughts and prayers below.

(Excerpt from The Epoch Times. Photo Credit: Tima Miroshnichenko/Pexels)