The Paragon Health Institute has published a new research report, “Medicaid Expansion’s Growing Improper Enrollment Crisis,” authored by economist Liam Sigaud. The analysis estimates that almost half of the people enrolled through the Affordable Care Act’s Medicaid expansion in 2024 may not have satisfied the program’s eligibility requirements. According to the report, improper enrollment resulted in an estimated $32.9 billion in federal expenditures during 2024, with states shifting a significant portion of the financial burden to federal taxpayers.
The report was released alongside testimony from Paragon President Brian Blase, Ph.D., before the U.S. Senate Budget Committee during a hearing titled “Medicaid: The Reality.”
Blase emphasized that Medicaid funding must be directed toward individuals who legitimately qualify for assistance. He noted that money spent on people who are not eligible reduces the resources available for vulnerable groups, including children, pregnant women, seniors, and individuals with disabilities. According to Paragon’s findings, improper enrollment has become widespread across Medicaid expansion programs in a number of states.
Sigaud’s analysis builds on earlier Paragon research by comparing Census Bureau survey information with state Medicaid enrollment data. The study estimates that approximately 9.2 million of the 20.2 million people enrolled through Medicaid expansion in 2024 may have been ineligible, representing about 46 percent of total expansion enrollment. Even when applying a more cautious methodology that assumes all eligible individuals were enrolled, the research still identifies more than 5 million potentially improper enrollees.
The report attributes part of the problem to the way Medicaid expansion is financed. Under the ACA, the federal government covers at least 90 percent of the cost of expansion beneficiaries, substantially reducing the financial responsibility of individual states. Paragon argues that this arrangement can encourage states to maximize the number of people classified under the expansion category in order to increase federal reimbursement.
Major findings from the report include:
An estimated 9.2 million Medicaid expansion enrollees, or approximately 46 percent of all expansion beneficiaries, may have been ineligible in 2024. Improper enrollment is estimated to have generated approximately $32.9 billion in federal costs during 2024. About one-third of those improperly enrolled in the expansion category appear to have qualified for traditional Medicaid instead. Classifying these individuals under the expansion program can provide states with a considerably higher federal reimbursement rate. California accounted for an estimated 3.1 million improper expansion enrollees and more than $10 billion in associated improper federal spending in 2024. The estimated number of improperly enrolled individuals increased significantly between 2019 and 2024, rising from approximately 4.9 million to 9.2 million. The issue appears across the country rather than being concentrated in one particular state or region. Comparable data show that improper enrollment increased in 31 of the 32 states examined between 2019 and 2024. The report was released alongside testimony from Paragon President Brian Blase, Ph.D., before the U.S. Senate Budget Committee during a hearing titled “Medicaid: The Reality.”
Blase emphasized that Medicaid funding must be directed toward individuals who legitimately qualify for assistance. He noted that money spent on people who are not eligible reduces the resources available for vulnerable groups, including children, pregnant women, seniors, and individuals with disabilities. According to Paragon’s findings, improper enrollment has become widespread across Medicaid expansion programs in a number of states.
Sigaud’s analysis builds on earlier Paragon research by comparing Census Bureau survey information with state Medicaid enrollment data. The study estimates that approximately 9.2 million of the 20.2 million people enrolled through Medicaid expansion in 2024 may have been ineligible, representing about 46 percent of total expansion enrollment. Even when applying a more cautious methodology that assumes all eligible individuals were enrolled, the research still identifies more than 5 million potentially improper enrollees.
The report attributes part of the problem to the way Medicaid expansion is financed. Under the ACA, the federal government covers at least 90 percent of the cost of expansion beneficiaries, substantially reducing the financial responsibility of individual states. Paragon argues that this arrangement can encourage states to maximize the number of people classified under the expansion category in order to increase federal reimbursement.
Major findings from the report include:
The research also indicates that Medicaid expansion enrollment remained considerably higher than pre-pandemic levels even after states completed eligibility reviews and enrollment in traditional Medicaid moved closer to its pre-pandemic level.
According to the report, the underlying financing model of the ACA may contribute to these enrollment problems. The federal government covers at least 90 percent of expenses for Medicaid expansion beneficiaries, compared with approximately 57 percent for traditional Medicaid populations. Paragon argues that this difference can give states a financial reason to maximize enrollment in the expansion category, including by placing beneficiaries who would otherwise qualify for traditional Medicaid into the more generously funded expansion group.
The report acknowledges that Congress and the Trump Administration have already introduced several measures intended to address these concerns. These include requiring eligibility reviews for expansion beneficiaries at more frequent intervals and establishing penalties associated with excessive eligibility errors.
Paragon argues that additional steps are needed to strengthen the program’s integrity. Its recommendations include improving eligibility verification procedures, increasing oversight of state enrollment practices, and eventually restructuring federal matching arrangements so that states no longer have financial incentives to prioritize able-bodied, working-age adults covered under Medicaid expansion over beneficiaries traditionally eligible for Medicaid.
The complete report, “Medicaid Expansion’s Growing Improper Enrollment Crisis,” is available through the Paragon Health Institute.
The report’s conclusions were also discussed in a Wall Street Journal opinion article by Liam Sigaud and Brian Blase, titled “How California Cheats ObamaCare’s Medicaid Expansion,” published on August 2, 2026. The article examines how Medicaid’s funding structure can encourage states to increase expansion enrollment while transferring a larger share of the resulting costs to federal taxpayers. Fox Business also reported on the research in an exclusive news report.
According to the report, the underlying financing model of the ACA may contribute to these enrollment problems. The federal government covers at least 90 percent of expenses for Medicaid expansion beneficiaries, compared with approximately 57 percent for traditional Medicaid populations. Paragon argues that this difference can give states a financial reason to maximize enrollment in the expansion category, including by placing beneficiaries who would otherwise qualify for traditional Medicaid into the more generously funded expansion group.
The report acknowledges that Congress and the Trump Administration have already introduced several measures intended to address these concerns. These include requiring eligibility reviews for expansion beneficiaries at more frequent intervals and establishing penalties associated with excessive eligibility errors.
Paragon argues that additional steps are needed to strengthen the program’s integrity. Its recommendations include improving eligibility verification procedures, increasing oversight of state enrollment practices, and eventually restructuring federal matching arrangements so that states no longer have financial incentives to prioritize able-bodied, working-age adults covered under Medicaid expansion over beneficiaries traditionally eligible for Medicaid.
The complete report, “Medicaid Expansion’s Growing Improper Enrollment Crisis,” is available through the Paragon Health Institute.
The report’s conclusions were also discussed in a Wall Street Journal opinion article by Liam Sigaud and Brian Blase, titled “How California Cheats ObamaCare’s Medicaid Expansion,” published on August 2, 2026. The article examines how Medicaid’s funding structure can encourage states to increase expansion enrollment while transferring a larger share of the resulting costs to federal taxpayers. Fox Business also reported on the research in an exclusive news report.