Report Estimates $33 Billion Lost to Improper Medicaid Enrollment

Economist Liam Sigaud, author of the report, matched Census Bureau survey data with state records to identify approximately 9.2 million ineligible participants out of 20.2 million total expansion enrollees. Even under conservative modeling, the analysis flags more than 5 million enrollees who appear to lack the necessary qualifications. This trend has accelerated significantly, with improper enrollment rising from 4.9 million in 2019 to 9.2 million by 2024 across 31 of the 32 states analyzed.

Paragon President Brian Blase, who presented these findings to the U.S. Senate Budget Committee, attributes the surge to the Affordable Care Act's financing structure. Because the federal government covers at least 90 percent of expansion costs compared to roughly 57 percent for traditional Medicaid, states face a clear financial incentive to prioritize expansion enrollment. The report notes that California alone accounts for 3.1 million of these ineligible enrollees, resulting in over $10 billion in federal spending. To address the issue, researchers suggest strengthening eligibility verification and adjusting federal matching rates to remove the current bias toward enrolling able-bodied, working-age adults.