U.S. drops thousands from ACA coverage

Ken Alltucker

USA TODAY

About 760,000 enrollees will be kicked off Affordable Care Act insurance exchanges as part of a review by federal health officials and Vice President JD Vance’s anti-fraud task force.

Vance and Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz on Sept. 22 announced subsidy payments will be canceled for these ACA sign-ups they claim were fraudulent, improper or, in some cases, done with phantom enrollees.

Oz said the purge involved individuals who often never filed a claim for a doctor’s visit, filled a prescription or responded to queries from government fraud investigators. Oz said officials are investigating another 400,000-plus ACA sign-ups they suspect might be fraudulent. Vance estimated that removing them would save the federal government about $2.2 billion.

In June, the U.S. Department of Health and Human Services reported that as of February, about 19.2 million people were enrolled in an ACA plan, also known as Obamacare, down from 23.1 million who signed up for coverage by January 2026. About 24.2 million were signed up as of January 2025.

In addition to canceling subsidy payments, Oz announced a six-month moratorium on new brokers who sell ACA plans. The moratorium won’t apply to existing brokers who help consumers sign up for ACA plans.

'There will be no new brokers for Obamacare in this country for the next six months,' Oz said. 'Most of the fraud, a disproportionate amount of fraud, is taking place from these individuals.'

Since January, CMS has terminated more than 200 'non-compliant' agents and brokers that market ACA plans. The agency also sent more than 500 'intent-to-terminate' notices this summer to brokers who submitted ACA applications missing information such as consumers’ Social Security numbers.

CMS officials said the fraudulent sign-ups often are arranged by brokers for people who were unaware they were enrolled in an ACA plan.

In other cases, people weren’t eligible for subsidies because they had access to employer health insurance or earned too much income to qualify. ACA plans offer sliding-scale subsidies to people who earn up to four times the federal poverty level, which in 2026 is $63,840 for an individual or $132,000 for a family of four. Those who earn more than four times the federal poverty level can enroll in an ACA plan but aren’t eligible for subsidies.

When Congress didn’t extend enhanced subsidies that expired after 2025, average costs for ACA enrollees who wanted to keep their insurance plans soared 114% in 2026, according to KFF, a health policy nonprofit.

Because brokers are key to how people enroll, the freeze 'may negatively affect enrollment and potentially margins related to higher risk pool in a market that is already contracting' as enhanced subsidies expire, said Morningstar analyst Julie Utterback.

A blanket moratorium 'would punish legitimate professionals instead of targeting the bad actors responsible for fraud,' said Mychal Walker, president of the National Association of Benefits and Insurance Professionals, a trade group that urged CMS to adopt targeted safeguards instead.

Brian Blase, a White House adviser during President Donald Trump’s first term, runs the conservative think tank Paragon Health Institute, which issued reports on brokers orchestrating phantom Obamacare sign-ups. He said the crackdown on enrollment fraud is welcome news for taxpayers. He said brokers 'earned massive commissions by manipulating applications and enrolling people without their knowledge.'

Contributing: Reuters

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