CBO’s most recent estimates show that federal spending on Obamacare subsidies will remain well above pre-pandemic estimates. The One Big Beautiful Bill made important changes to improve the integrity of the exchanges.
This is especially important given the massive extent of improper enrollment in the exchanges. The CBO’s 2026 baseline projection reduces the rate of growth of Obamacare spending by $212 billion over ten years, 2027 to 2036, versus the baseline projection published in 2025. However, the 2025 baseline for the same period jumped by $583 billion from the 2021 baseline.
The main driver of the Biden spending increase was a set of administration policies that prioritized increasing Obamacare enrollment at any cost along with an expansion of subsidies as a COVID-era boost. These policies weakened program integrity measures, stopped income verification for many enrollees, and essentially opened a year-round enrollment period—and created large incentives for enrollees, brokers, and insurers to misstate applicant income to maximize subsidies. Paragon estimates that 6.2 million people were improperly enrolled in Obamacare in 2026.
(The 2021 baseline stops in 2031; and the 2025 baseline stops in 2035. Those baselines are extrapolated through 2036 using common-sense assumptions, as indicated by the dotted line in the figure.)
