That reality was largely hidden from many who received the enhanced subsidies because their out-of-pocket premium payments were capped based on income. Price hikes above that cap were paid by taxpayers, which meant the enhanced subsidies were now even more important for people with modest incomes.
Meanwhile, the real wages of American workers were not keeping pace with the price of consumer goods, let alone the skyrocketing cost of health insurance.
Around that time, Rep. Jim McGovern (D-Mass.) commented on the value of the enhanced subsidies to members of his congressional district. “Without the Inflation Reduction Act, the average premium for these individuals would have increased by 76 percent, to $1,430, in 2023,” he said in a statement.
By 2025, the year the enhanced subsidies were again scheduled to expire, Obamacare premiums were at their highest point ever. Health insurers realized that, without the additional subsidies, healthier enrollees would drop their coverage in 2026, leaving a smaller, more expensive pool of people to insure, according to the Peterson-KFF Health System Tracker.
Insurers responded with premium increases ranging from 10 percent to 59 percent, Peterson-KFF found, with the median being 18 percent.
Congressional Democrats argued that the enhanced subsidies had become essential and moved to make them permanent. Some Republicans agreed that a second extension of one to three years was needed.
After five years of premium increases largely paid for by federal taxpayers, both the insurers and the insured appear to have become dependent on the enhanced subsidies.
Increased Fraud
Most Republicans opposed extending the enhanced subsidies. Before spending more money on rising premiums, they said another problem hidden in the system needs to be fixed first—fraud.
There has been no dispute among lawmakers that the enhanced subsidies have been a boon to consumers.
The average Obamacare premium for 2025 was $619 per month, of which subsidies covered more than $500. More than 10 million enrollees, 46 percent of those receiving aid, paid $10 or less per month out of pocket for premiums.
About 8 million paid $0, according to Brookings.
That’s exactly the problem, according to some analysts, because the possibility of enrolling large numbers of people who would never receive a bill created a ripe opportunity for fraud.
Many people were enrolled in the program without their knowledge by unscrupulous insurance brokers, Blase alleges, prompting the federal government to send a commission check to them—and premium payments to an insurance company.
These phantom enrollees are detected in part by their lack of activity once enrolled, Blase said.
“In 2024, nearly 12 million enrollees did not use their plan a single time—up from fewer than 4 million in 2021,” Blase told the House Judiciary Committee on Dec. 10.
Overall, 35 percent of all exchange enrollees never used their plan, and 40 percent of fully subsidized enrollees did not have a single claim, which Blase said is double the rate in both the commercial market and pre-pandemic Obamacare.
America’s Health Insurance Providers, the trade association for health insurance companies, disputed that claim.
“A ‘no-claims’ year is evidence that a consumer stayed healthy or only had a few months of coverage—not that taxpayer money was misdirected or that their policy was illegitimate,” the group said in an Aug. 18 statement.
Yet in December 2025, the Government Accountability Office provided evidence of enrollment fraud in Obamacare that suggests fake accounts are being created.
Investigators were able to enroll 20 nonexistent identities in Obamacare in 2024 by using Social Security numbers that had never been issued to any person and other easily created counterfeit documents.
Of the 20 false enrollments, 18 were still active in September 2025, costing taxpayers more than $10,000 per month.
Investigators also found 26,000 accounts that received subsidies in 2023 based on Social Security numbers that matched records in the Social Security Administration’s death file.
More than 7,000 Social Security numbers belonged to people who were reported dead before enrolling in Obamacare, and 19,000 Social Security numbers matched death data by number but not name and address, indicating that false identities may have been created for enrollment.
Taxpayers paid more than $94 million in subsidies for one year based on those numbers.
Another indication of fraud is the number of states where enrollment in Obamacare plans with a $0 premium is unreasonably high compared to the number with a qualifying income.
Twenty-four states have more Obamacare enrollees claiming incomes between 100 percent and 150 percent of the federal poverty level than there are people living in the state with that income, according to data from the U.S. Census Bureau.
The problem appears worse in states that have not adopted expanded Medicaid, which would have increased Medicaid eligibility to 138 percent of the federal poverty level.
Obamacare customers are automatically re-enrolled each year, so a fictitious account would continue to generate fraudulent commissions and wasteful insurance payments until detected.
Fraudulent enrollment costs up to $20 billion per year, according to Paragon Health Institute.
Making Health Care AffordableThe enhanced subsidies expired on Dec. 31, 2025.
Congressional Republicans and Democrats continue to agree that the U.S. health care system has become unaffordable and want to address the problem. They differ in approach.
Democrats generally favor government intervention in the system, as in the case of Obamacare, where taxpayers pitch in to cover rising costs.
The Senate in December 2025 rejected a proposal to make the enhanced subsidies permanent.
House Minority Leader Hakeem Jeffries (D-N.Y.) said at a press conference on Jan. 5 that his party continues to seek an extension of the subsidies “to protect the health care of tens of millions of … everyday Americans, middle-class Americans and working class Americans.”
Without the subsidies, Jeffries said, some consumers would face cost increases of up to $2,000 or more per month.
Republicans generally favor using the power of government to create marketplace competition. Senate Republicans recently presented a plan to provide dedicated funds directly to consumers, which they could use to shop for health care. That plan, too, was rejected by the Senate.
Sen. John Thune (R-S.D.), the Senate majority leader, addressed the differing philosophies in a Dec. 16, 2025, press conference.
“If [Democrats are] willing to accept changes that actually would put more power and control and resources in the hands of the American people, and less of that in the pockets of the insurance companies, I think there’s a path forward,” he said.
The House passed a three-year extension of the enhanced subsidies on Jan. 8. A bid by Senate Minority Leader Chuck Schumer (D-N.Y) to pass the bill via unanimous consent in the upper chamber failed on Jan. 14.
President Donald Trump has said he would veto any extension of Obamacare subsidies that came to his desk.
