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Improper Medicaid expansion enrollment may have cost $32.9B in 2024
A Paragon Health Institute study estimates about 9.2 million expansion enrollees inappropriately lacked eligibility in 2024, worsening risk pool assumptions that affect private coverage pricing.
A new study quantified a long suspected issue in Medicaid’s expansion program, finding that roughly 9.2 million people enrolled in expansion likely do not meet eligibility requirements, according to research published by the Paragon Health Institute, as described by Insurance Business America.
The outlet reports that federal costs tied to improper Medicaid expansion enrollment reached $32.9 billion in 2024 alone. It also links the enrollment distortion to how Medicaid expansion is financed under the Affordable Care Act, where states must police the rolls but the federal government pays at least 90 percent of expansion costs.
Insurance Business America notes that the COVID-era continuous coverage requirement prevented eligibility checks from March 2020 to May 2023, and the subsequent unwinding never fully corrected the problem. As of June 2025, expansion enrollment remained 21 percent above pre-pandemic levels, while improper enrollment rose nearly from 4.9 million in 2019 to 9.2 million in 2024.
For benefits advisors and brokers, the study’s findings have implications for employer-sponsored insurance, because the integrity of Medicaid enrollment affects risk pool and take-up assumptions used in private market pricing. The story also points to legal scrutiny, citing a Massachusetts lawsuit against UnitedHealthcare over alleged improper Medicaid payments.