In the Greater Obamacare Enrollment Fraud, we estimated 6.4 million Obamacare enrollees in the 100-150 percent Federal Poverty Level (FPL) category are improperly enrolled, meaning they are ineligible for the subsidy amount.
The 100-150 percent FPL category is especially vulnerable to fraud because enrollees pay no premium for a 94 percent actuarial value plan given the enhanced COVID-era subsidies to insurers. These zero-dollar plans are a magnet for fraud, because individuals can falsely report their income, and unscrupulous brokers can fraudulently enroll or switch consumers without their knowledge to boost commissions. Insurers have strong financial incentives to tolerate or encourage fraud because they collect large government payments—on behalf of many people who are unaware of their enrollment.
This PIC highlights the scale of the problem: from 2020 to 2025, enrollment in the 100–150 percent FPL category surged from 3 million to over 10 million, just in states with the federal exchange. In fact, enrollment in this group grew three times faster than all other categories combined. In 2025, an astonishing 55 percent of all enrollees claimed income in this narrow band. (See a previous Paragon Pic for the percentage of enrollees by FPL category over time.)
Zero-dollar plans proliferated after the enactment of Biden’s COVID credits, which are set to expire at the end of this year. If not allowed to sunset, these enhanced subsidies will continue to distort the market and fuel enrollment fraud and improper spending.
This growth pattern underscores the urgent need for anti-fraud measures. First, let the COVID-era subsidies expire. Second, require a minimum premium payment for everyone, regardless of the type of plan purchased. Third, effectively implement eligibility-verification, by building off of reforms in the One Big Beautiful Bill which include strengthening income verification to ensure subsidies are only granted to eligible individuals.
