The Democrats have named their price to end the government shutdown — an additional $350 billion for health care over the next decade. Critics say a big chunk of that money may go to ghosts.

At issue are the generous subsidies the Biden administration created for Affordable Care Act policies, sweeteners that are slated to expire in December. Making health care essentially free for millions of Americans, those policies have sent enrollment in Obamacare plans skyrocketing. But a recent study found they have also sparked a curious phenomenon: an estimated 12 million enrollees “without a single claim — no doctor visit, lab test, or prescription filled” in 2024.

The Paragon Health Institute study reports that this is triple the number of no-claim policyholders before the Biden sweeteners were put in place.

“Among those now eligible for zero-premium plans with low or no deductible,” the study found, “that number increased nearly sevenfold. … A whopping 40% of enrollees in fully subsidized plans had no claims in 2024. In 2024 alone, taxpayers sent at least $35 billion to insurers for people who paid no premiums and never used their plan,” the report said.

Although many analysts suspect that these numbers suggest widespread fraud, Democrats and the insurance industry argue that they reflect consumers taking advantage of affordable coverage. They warn that the expiration of Biden-era reforms will make policies far more expensive for more than 20 million Americans.

“If Congress fails to extend the health care tax credits, millions of Americans will face immediate and severe premium increases, leading many to forgo coverage altogether,” said Chris Bond, a spokesman for AHIP, the lobbying arm of the health insurance industry. “Congress must act as quickly as possible to protect Americans from this affordability crisis.”

As Democrats have made health care their line in the sand on the government shutdown, Biden-era expansions of Obamacare are receiving new attention as a symbol of both expanding access to health care and of spending run amok.

Critics say they underscore the findings of the Department of Government Efficiency, which has highlighted a lack of accountability in massive government spending programs at a time when the federal government is struggling to corral massive deficits and debt. They say the Biden sweeteners also illustrate how and why government spending keeps increasing: Once a subsidy is put in place, it is hard to take it away from voters.

Swollen rolls

The Obamacare expansion at issue came about through legislation and regulations during Biden’s term and was often cast as a response to the COVID-19 pandemic. First, the scope of who was eligible for subsidies was broadened to households with incomes above 400% of the federal poverty line — making a family of four earning up to $160,000 eligible for subsidized plans. Also, increased subsidies made Obamacare free for those with incomes between 100% and 150% of the poverty line, and longer enrollment periods were introduced.

The cost for this, on the other hand, is borne by taxpayers.

“Biden’s COVID credits didn’t reduce health care costs — they just shifted them to taxpayers while padding insurer and enrollment intermediary profits,” Paragon President Brian Blase said.

Like all gigantic markets and massive government programs, the Affordable Care Act and what people pay each month have become a very complicated thing, varying by age, state, plan level, and other factors. But the figures for the Obamacare “reference plan” (silver level) reveal what has happened since the COVID pandemic.

In 2021, when Biden was inaugurated, the basic plan cost an individual $27 a month if reported income was at or below the federal poverty line, which stood at around $14,500 a year. For those making 50% more, the “reference plan” cost $75 a month, and so on up to $152 a month for someone making more than $30,000. Those monthly payment figures were constant regardless of what the insurers charged, with taxpayers making up the difference.

Through legislation Biden pushed through by narrow majorities or via reconciliation, the amount someone would pay each month in the first two categories dropped to zero. And as Obamacare became essentially free, millions signed up — enrolling at rates the plan had never seen since its inception in 2013.

The overall figures reflect this explosion. Between 2016 and 2020, an average of 8.5 million people signed up for a subsidized Obamacare policy each year, and in none of those years did the figure equal 9 million, according to the Centers for Medicare and Medicaid Services.

In 2021, however, the subsidized total topped 10 million, and by 2024 it had nearly doubled to 19.5 million, CMS figures show.

“It’s all counterintuitive that when enrollment isn’t being publicized, no one is out beating the bushes to get people enrolled like we had in the early years of Obamacare,” said Ed Haislmaier, a health care expert at the Heritage Foundation. “Amazing that a product’s sales would go through the roof when nobody was talking about it.”

Some analysts believe the numbers indicate rampant fraud. Blase claimed in a letter to the Wall Street Journal that the expansion has created an explosion of phantom patients — including 6.4 million of them so far in 2025. “The problem isn’t real people with coverage they don’t use — it’s fraudulent sign-ups who never should have been subsidized,” he wrote.

Haislmaier agreed. “We don’t have an exact number for how many people might be fake. I don’t think anyone does,” he said. “What we do have is a lot of circumstantial evidence, a lot of data points, and a lot of information about how the markets have always operated to suggest there is massive fraud here.”

We’re sending billions of dollars to insurance companies for policies that people are unaware they’re enrolled in and do not use,” he posted.

On the other side are Democrats who make strange political bedfellows of the insurance industry. Some who traditionally oppose big business, such as Sen. Elizabeth Warren (D-Mass.) or socialist Sen. Bernie Sanders (I-Vt.), insist these recent subsidies must continue, preferably permanently. For them, Obamacare more than doubling — from 11.4 million to more than 24 million between 2020 and today — is a success sign of government-run health care.

Warren compared ending the subsidies to taking health care away from people.

“Still waiting to find out how Trump and Republicans think cutting health insurance for 15 million Americans makes America healthy again,” she posted on Sept. 15.

Polls suggest support for government-subsidized health care is a partisan issue. Last November, Gallup reported that “90% of Democrats say that the federal government is responsible for American health care coverage, while 65% of Independents hold the same view. Although only 32% of Republicans share that opinion.” Another survey found that among those receiving subsidies, people who voted for Democrats outnumbered Republicans by more than two to one.

Insurers say the Paragon study was flawed and accused the think tank of misunderstanding how insurance works. It’s not unusual for homeowners or car insurance policyholders to go years without filing a claim, and the same could be true with health care, they say. According to the industry and Democrats, the ballooning numbers reflect a thriving market in which many more Americans are enjoying health care coverage, as stated in a rebuttal released by AHIP in August.

Republicans want to let the subsidies expire. Democrats want to make them permanent.

Of course, that leaves some wiggle room, such as extending the subsidies for another year or some set period of time, a kicking-the-can option long favored by Congress.

Whatever the outcome, large subsidies that have always been part of Obamacare will continue. For all the hue and cry about rising costs, the elimination of Biden-era sweeteners would simply return the system to the way it was operating before 2021, Kalisz said.

“It’s crony math, a kind of corporate welfare,” she told RealClearInvestigations. “Why are the insurers now making it seem like all the subsidies are going away? It’s a form of scaring and spooking the public.”

James Varney, The Blaze