Paragon Health Institute warns that millions of Americans may have been enrolled in zero‑premium ACA plans without their knowledge, leaving taxpayers to cover the bills and exposing systemic incentives that reward enrollment over care.
Imagine waking up to discover you’re signed up for health coverage you never asked for, while taxpayers pay the premiums. Paragon Health Institute, led by Brian Blase, estimates up to 6.4 million Americans could be in that position, enrolled in Affordable Care Act plans that cost them nothing but are fully financed by federal subsidies. That dynamic creates strong incentives for brokers and insurers to focus on enrollment and commissions rather than patient care.
Paragon’s analysis points to expanded subsidies passed in 2021 and 2022 as the turning point that widened the zero‑premium window. Critics say the reconciliation changes made whole insurance plans effectively free for many income brackets, and that opened opportunities for bad actors to exploit people’s data or sign folks up without clear consent. Many enrollees reportedly never used the coverage, because the government paid insurers directly and consumers did not notice any charges.
The commission structure is a major part of the problem: insurers paid large commissions to agents who enrolled people in these no‑cost plans, and that created a market for volume over value. Blase highlights the mismatch: “The government was sending massive checks to insurance companies who were making windfall profits on behalf of people who didn’t use any health care.” When payments and profits are divorced from actual care delivered, accountability collapses.
Paragon’s figures also revealed that about 40% of those in fully subsidized plans used no healthcare services at all in 2024, a rate roughly 2.5 times higher than expected. That means a huge chunk of taxpayer spending bought insurance that sat unused, while commissions and insurer revenue still flowed. For conservatives focused on fiscal discipline, that’s a stark sign federal dollars are being wasted rather than targeted to real need.
The broader funding picture makes the issue worse. Blase notes insurers now depend on taxpayer money for roughly 85% of their revenue in these programs, effectively making the U.S. Treasury their largest customer. With Washington footing the bill, insurers have less incentive to control costs, improve efficiency, or prioritize patient outcomes, because profits can come from enrollment churn rather than service quality.
State‑level examples show how federal funding can amplify waste and fraud when oversight is weak. Paragon flags Minnesota’s historic problems with federally linked programs, New York’s rise in Medicaid home health aides often paid to family members, and troubling activity in California’s hospice sector. Those patterns are not isolated; they reflect a broader weakness in systems where states can draw heavily on federal dollars without facing hard consequences for poor stewardship.
Blase argues federal policy actively enables these incentives, saying, “It’s the essential step. The federal government is bankrolling the fraud, waste, and abuse in the states, and as long as states can draw on an open checkbook from Washington, they don’t have incentives to make sure that dollars are appropriately spent.” From daycare programs paid despite empty facilities to suspect home health claims, taxpayer money is vulnerable when oversight is treated as optional instead of mandatory.
For policymakers who favor restrained government and stronger accountability, the Paragon findings are a call to action: examine how subsidies are structured, audit enrollment practices, and rewire incentives so funding follows genuine need. Without those changes, taxpayers keep footing large bills while enrollment figures and commissions rise, and the system rewards paperwork over care in ways that undercut public trust.
