The Affordable Care Act (ACA), better known as Obamacare, has been exposed to a rampant multi-million dollar fraud scheme that is projected to cost American taxpayers billions in 2026, according to a shocking independent report released Tuesday.
And the findings could put a permanent stain on Barack Obama’s crowning achievement while he was in office.
Here’s what we know.
The study alleges that approximately 6.2 million, or nearly 27% of all ACA exchange sign-ups, were improper in 2026.
The analysis cited in the study also estimates U.S. taxpayers will pay up to $25 billion in improper subsidies in 2026, almost a quarter of total projected ACA subsidy spending for the year.
“Despite the expiration of COVID-era subsidy boosts and Trump administration efforts to reverse negligent Biden-era policies, excessive subsidies, zero premium plans, weak verification systems, automatic re-enrollment, and misaligned incentives for enrollment intermediaries have created a perfect storm for improper and phantom enrollments that drain tens of billions from taxpayers while undermining program integrity,” Paragon Health Institute President Brian Blase said in a statement.
“The findings also suggest that a significant share of the enrollment declines expected over the next two years will reflect the removal of duplicate, improper, and phantom enrollment rather than losses of legitimate coverage.”
Why did Obamacare fraud & improper and phantom enrollement explode?
Because everyone involved benefited.
Enrollee – free coverage.
Broker – commission.
Insurer – a taxpayer-funded subsidy to cover the entire premium.
The result? More than 25% of enrollees are improper. 1/5 https://t.co/0z4EfajRRr
— Brian Blase (@brian_blase) June 3, 2026
Paragon Health Institute’s report, which also analyzes 2026 open enrollment data and Census Bureau population estimates, found that improper enrollment is heavily concentrated in states that use the federal HealthCare.gov platform.
In HealthCare.gov states, 56% of sign-ups claimed the lowest income category qualifying for maximum subsidies in the 2026 open enrollment period, according to the study.
“The ACA exchanges cannot function effectively if millions of sign-ups improperly receive taxpayer-funded subsidies and enrollment systems remain vulnerable to unauthorized and phantom enrollment,” according to the report.
The news surrounding Obamacare comes as the ACA marketplace is reportedly facing a huge drop in enrollment across the nation in the wake of expiring enhanced federal subsidies.
Plan sign-ups declined by more than a million to 23.1 million individuals during the 2026 Open Enrollment Period, marking the steepest single-year drop since the ACA Marketplaces launched, according to KFF estimates released in mid May.
The widespread fraud linked to Obamacare has also caught the attention of the Centers for Medicare and Medicaid Services (CMS).
“We believe that 35%, roughly, of the people that are using Obamacare exchanges … may not be legit,” Centers for Medicare and Medicaid Services Administrator Mehmet Oz said Tuesday during a White House press briefing.
“And that actual number may translate to 5-6 million people we could be paying premiums for.”
.@DrOzCMS on the disaster known as Obamacare: "We believe that 35%, roughly, of the people that are using Obamacare exchanges… may not be legit. And that actual number may translate to 5-6 million people we could be paying premiums for." pic.twitter.com/ighVSi83m9
— Rapid Response 47 (@RapidResponse47) June 2, 2026
CMS has not made any additional comments surrounding the scandal at the time of publication.
This is a developing story. Check back for updates.