CMS cites ACA marketplace enrollment fraud in issuing 760,000 coverage cancellations

CMS has canceled roughly 315,000 enrollments encompassing 760,000 people in Affordable Care Act (ACA) marketplace plans, citing suspected fraud, according to a Sept. 22 announcement by the Trump administration.

And the numbers soon could grow. The administration also plans to commence verification of legal residency, Social Security numbers, and income and other eligibility criteria for at least 419,000 additional enrollees, Vice President JD Vance and CMS Administrator Mehmet Oz, MD, said during a news conference.

The announced measures apply to the federally facilitated ACA marketplaces, along with state-based marketplaces that use Healthcare.gov. State-run marketplaces were not affected.

Another part of the announcement was a moratorium on new ACA brokers, along with termination of agents and brokers who do not have a plan-year 2026 ACA agreement. The moratorium is scheduled to run through Feb. 1, 2027, according to an interim final rule with comment period.

In paring the ACA rolls of the allegedly fraudulent accounts, CMS identified $2.2 billion in expected taxpayer savings linked to a reduction in paid subsidies for buying marketplace plans.

“We’re not paying insurance for non-existent ghosts, and so we’ve collected that money back,” Oz said. He added that the administration’s actions bolster the sustainability of government-run healthcare programs.

CMS and insurers reviewed about 315,000 enrollments

For the 760,000 individuals across 315,000 enrollments, CMS and ACA health plans undertook a review and investigation “in accordance with CMS’s existing processes for unauthorized enrollments,” per the announcement.

Fraudulent enrollments may involve phantom identities, unauthorized sign-ups or missing Social Security numbers, Oz said. Brokers have incentives to enroll as many people as possible without regard for the legitimacy of the enrollments, he added.

The administration said various steps were taken to verify whether the 760,000 enrollees were eligible.

“We have been writing them, telexing them, walking to them, FedExing, whatever we could possibly do to get in touch with them,” Oz said.

The lack of a response, alongside an absence of claims history for the enrollees in question, was seen as evidence that they were phantom enrollments or had been enrolled without their knowledge.

For the cohort of 419,000 enrollees, Vance said the administration would seek to confirm lawful U.S. residence and income thresholds for ACA subsidy eligibility. The administration has found anomalies with that group but does not see as clear a fraud profile compared with the group that already has been disenrolled.

“We’re giving another chance to them to be able to try to tell us that they really have a Social Security number, or they really did have the insurance,” Oz said. “Frankly, if you have a claim, it gives us confidence [that] at least you know you have insurance.”

Administration officials described deploying AI-based detection tools to identify patterns of potential fraud, rather than relying on case-by-case manual review. The tools can examine specific broker channels for issues such as enrollment spikes or a widespread absence of Social Security numbers.

Coverage-loss concerns accompany CMS’s anti-fraud action

A concern expressed about the announced actions is the possibility that the enrollment purge includes people who were legitimately enrolled but unable to respond to the administration’s outreach for any reason.

The administration is “piling on more red tape, more confusion and more opportunities for people to lose the coverage they rely on,” Brad Woodhouse, president of the left-of-center advocacy group Protect Our Care, said in a written statement.

Several Democrats in Congress issued statements criticizing the move. Rep. Nancy Pelosi (D-Calif.) said the administration’s steps “will leave working families unable to get the care they need.”

“Using the false pretext of fighting fraud to strip Americans of their healthcare is as cynical as it is cruel,” Pelosi added.

ACA marketplace enrollment already is down in 2026

ACA enrollment already has dropped significantly in 2026 following the end of enhanced subsidies for buying marketplace coverage. In February, the enrollment tally was 19.2 million, for a year-over-year drop of 2.9 million. The Trump administration said program-integrity actions, including removal of improper and phantom enrollments, also contributed significantly to the decrease.

Beyond the expiration of the higher subsidies, which were in place from 2021 through 2025, a clause in the One Big Beautiful Bill Act prohibits lawfully present immigrants from receiving ACA subsidies if they are ineligible for Medicaid due to their immigrant status and have income below 100% of the federal poverty level.

ACA-related legislative changes for 2027 are set to include further restrictions on categories of legal immigrants who have access to marketplace coverage, ending eligibility for refugees, people seeking asylum and people with Temporary Protected Status.

The administration has attempted to further tighten enrollment via the annual ACA rulemaking, but key enrollment-related provisions in both the 2026 and 2027 final rules are tied up in court.