Pedro Rojas holds a sign directing people to an insurance company where they can sign up for the Affordable Care Act, also known as Obamacare. (Photo by Joe Raedle/Getty Images)
WASHINGTON - The Trump administration is halting enrollment in Obamacare health plans for more than 760,000 people it believes were fraudulently enrolled, Vice President JD Vance said Tuesday.
By the numbers:
Vance estimated the effort would save taxpayers $2.2 billion. The U.S. Centers for Medicare & Medicaid Services canceled about 315,000 plans last month, citing unverified citizenship or immigration documents and suspected improper enrollments.
CMS also plans to bar 569 brokers accused of submitting "statistically implausible rates of plan year 2026 applications" without required information, including applicants’ Social Security numbers.
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The backstory:
The plans, created under Democratic President Barack Obama’s signature Affordable Care Act, provide income-based subsidies. Republican President Donald Trump unsuccessfully sought to repeal the law during his first term and has proposed changes that would make the plans less comprehensive.
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Millions of people dropped their coverage this year as rising medical costs and the expiration of enhanced COVID-era subsidies made monthly premiums unaffordable.
Vance described the canceled enrollments as "a mix of both phantom people, but also real people who just don’t meet the eligibility requirements." He said some people were enrolled by brokers without their knowledge.
The administration will conduct additional reviews of between 419,000 and 450,000 people to verify that they are legal U.S. residents who meet income requirements.
CMS Administrator Mehmet Oz said the enrollees were labeled "phantoms" because officials believe many either do not exist or were unaware they had coverage. He said they had never filed claims and could not be reached despite repeated attempts.
Why you should care:
The administration is using an emergency-style rulemaking process to immediately freeze new Obamacare broker registrations, bypassing the usual advance notice-and-comment period.
Oz called the action a "temporary national moratorium" lasting six months and said most of the suspected fraud was concentrated among brokers.
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CMS said some brokers allegedly enrolled people without their consent, changed their plans without permission, used inaccurate information or created questionable applications to collect commissions.
The agency said brokers without a 2026 registration will be barred from participating until Feb. 1, 2027.
Analysts said the freeze could affect insurers that rely on brokers to enroll customers.
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Dig deeper:
CMS said unauthorized Obamacare enrollments could result in up to $6.6 billion in improper federal spending during the 2026 plan year.
The cancellations were led by Vance’s anti-fraud task force, which includes Health Secretary Robert F. Kennedy Jr., Oz and Federal Trade Commission Chairman Andrew Ferguson.
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CMS said it expects to recover about $2.2 billion in advance premium tax credit payments tied to the canceled enrollments. Oz said the amount would increase, calling the figure "the tip of the iceberg."
A Health and Human Services report released earlier this year estimated that nearly half of new Obamacare enrollments between 2021 and 2024 may have been improper, phantom or fraudulent. CMS said more than 1 million enrollees received coverage without providing a Social Security number.
The Source: Reuters contributed to this report. The story is based primarily on Reuters reporting, which cited statements from Vice President JD Vance, CMS Administrator Mehmet Oz and the Centers for Medicare & Medicaid Services. This story was reported from Los Angeles.