The Centers for Medicare and Medicaid Services announced the cancellation of approximately 315,000 ACA marketplace enrollments affecting around 760,000 individuals last month, citing allegations of unauthorized enrollments. The action, led by Vice President JD Vance’s White House Task Force to Eliminate Fraud, is estimated to save approximately $2.2 billion in taxpayer-funded subsidies. Additionally, the administration is verifying roughly 419,000 people to confirm they are legal U.S. residents and meet income requirements for ACA benefits.
During a Tuesday briefing, Vance characterized the situation as “rampant fraud,” contending that the previous administration operated a system that incentivized unauthorized enrollments while failing to verify applicant eligibility. CMS Administrator Dr. Mehmet Oz asserted that approximately 35 percent of current ACA enrollees have never utilized their coverage, having neither filled prescriptions nor seen a doctor. The Trump administration has made widespread fraud allegations across federal health programs and implemented restrictions on Medicaid funding and eligibility.
The enforcement action reflects broader concerns about enrollment growth in the ACA marketplace since the Covid-19 pandemic. Enrollment expanded from approximately 10 million people before the pandemic to roughly 22 million afterward. According to a June report from the Office of the Assistant Secretary for Planning and Evaluation, nearly half of enrollment increases from 2021 to 2024 was suspected to be improper, phantom, or fraudulent, with improper enrollment defined as individuals misrepresenting income to access free plans.
The surge in enrollment followed the American Rescue Plan passed in 2021, which enhanced subsidies to improve healthcare affordability during the pandemic crisis. Those expanded credits were subsequently extended but expired at the end of last year, raising premiums for many ACA enrollees. Currently, approximately 19.2 million Americans are enrolled in Obamacare plans according to the assistant secretary’s report.
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