Federal spending on subsidies for Affordable Care Act (ACA) individual market plans continued to surge in 2024, adding $35 billion in new spending from the year before — a single-year increase of more than 30 percent.
In this Paragon PIC, we compare 2019 through 2024 spending growth across major US health programs. We use 2019 as the base year because it is the last pre-pandemic year and precedes the Biden administration, whose policies turbocharged ACA and Medicaid spending. Spending on ACA subsidies grew by 115 percent in this five-year period — more than double the growth rate of Medicaid (51 percent) and nearly three times the growth rate of Medicare (39 percent).
This explosive trajectory in ACA spending was primarily driven by misguided policy decisions made under the Biden administration that tore up program integrity rules, allowed fraudsters to run rampant, and increased subsidies that mostly benefited large insurers. Paragon’s research has documented how expanded subsidies to insurers and loose guardrails fueled widespread improper enrollment. Millions of individuals were signed up for fully subsidized plans with zero monthly premiums, often through aggressive brokerage tactics or by misrepresenting income levels. A recent probe by the Government Accountability Office (GAO) confirmed that the ACA’s exchanges are highly vulnerable to fraud.
