Nicolai Haugsted
JD Vance says massive Obamacare crackdown will save taxpayers billions of dollars.
Washington is taking a sledgehammer to suspected fraud inside America’s health insurance marketplace, and hundreds of thousands of people have already been caught up in the crackdown.
President Donald Trump’s administration says years of improper enrollments have allowed taxpayer-funded subsidies to flow toward policies that were unauthorized or otherwise suspicious. Officials are now moving to claw that money back while tightening the rules governing the brokers who help Americans sign up.
More than 760,000 people have had their Obamacare coverage canceled as part of the effort, according to the Centers for Medicare & Medicaid Services. The agency says roughly 315,000 enrollments covering those individuals were confirmed as unauthorized following reviews conducted with insurers.
Vice President JD Vance says the cancellations could return around $2.2 billion in taxpayer-funded premium subsidies.
Hundreds of thousands lose their plans
Vance described the affected population as a combination of people who should not have been receiving coverage and individuals who may never have realized they were enrolled in the first place.
“It’s a mix of both phantom people, but also real people who just don’t meet the eligibility requirements,” Vance said according to Reuters.
Some consumers, he added, had allegedly been enrolled by brokers without their knowledge.
CMS Administrator Mehmet Oz similarly described many of the cases as “phantoms,” arguing that officials had found signs suggesting some supposed customers either did not exist or did not know they had insurance.
CMS says its investigations identified unauthorized enrollment activity before approximately 315,000 enrollments covering more than 760,000 people were canceled on August 31. Officials expect roughly $2.2 billion in advance premium tax credits associated with those policies to be returned.
The administration is not finished checking the books.
Vance said another 419,000 to 450,000 people will face additional verification to establish whether they legally reside in the United States and meet the income requirements for subsidized coverage.
Brokers are next in line
Health insurance brokers now face a crackdown of their own.
CMS issued notices this summer to 569 agents and brokers accused of submitting 2026 applications without important identifying information, including Social Security numbers. Sixty-six had already received termination notices after the first group had an opportunity to respond, according to the agency.
Officials say suspected misconduct has included enrolling customers without genuine consent, changing existing insurance plans without authorization and supplying inaccurate information.
Concerns about unauthorized broker activity are not entirely new. CMS introduced additional safeguards in 2024 after reporting an increase in unauthorized enrollment changes, including restrictions preventing newly involved brokers from simply altering a customer’s existing Marketplace coverage without additional verification.
Now the administration is going considerably further.
Washington freezes new broker registrations
CMS has announced a temporary nationwide moratorium on certain new broker registrations for the 2027 plan year.
Agents and brokers without an active Exchange Agreement for 2026 will be prevented from newly registering during the moratorium. CMS says brokers who first registered for the 2026 plan year account for a disproportionately large share of suspicious activity despite representing only a small fraction of broker-assisted enrollments.
Agency data show applications handled by that group were 2.7 times more likely to lack Social Security numbers and 2.6 times more likely to contain unresolved citizenship or immigration verification issues compared with applications handled by brokers registered before 2026.
Industry representatives warn that casting such a wide net could create problems of its own.
“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.
His organization has urged CMS to pursue more targeted safeguards rather than shutting the door on new registrations across the industry.
Obamacare is already losing customers
Timing could make the new restrictions particularly significant.
Obamacare, formally created by the Affordable Care Act signed by President Barack Obama in 2010, provides income-based subsidies to help millions of Americans purchase private health insurance.
Brokers remain an important route into that market. CMS data show that broker assistance has played a substantial role in HealthCare.gov enrollment, although its share declined in 2025 and 2026 following safeguards introduced against unauthorized changes.
Morningstar analyst Julie Utterback warned that restricting broker participation “may negatively affect enrollment and potentially margins related to higher risk pool in a market that is already contracting.”
That market has already faced pressure after enhanced pandemic-era subsidies expired and premiums increased for many customers.
Trump has long had a complicated relationship with the Affordable Care Act. His first administration unsuccessfully sought to repeal the law, while his current administration has pursued tighter eligibility and verification requirements rather than eliminating the system outright.
Oz says this is only the beginning
Officials argue that the potential scale of improper enrollment stretches well beyond the policies already canceled.
CMS had already ended premium subsidies for nearly 1.5 million people over the previous year after identifying cases involving ineligible financial assistance or unauthorized enrollment. The agency estimated those earlier actions produced nearly $10 billion in annualized savings.
Current enforcement is targeting both suspicious policies and the people accused of creating them.
“Every dollar lost to fraud is a dollar taken from hardworking taxpayers and the Americans these programs are intended to serve,” Oz said.
“We are using our data, enforcement authorities, and stronger safeguards to identify fraud and abuse, stop it, and recover taxpayer dollars.”
CMS says investigations will continue, with insurers expected to help identify additional potentially unauthorized enrollments and recover subsidies already paid.
Oz offered a considerably less bureaucratic description of where officials believe the investigation currently stands.
According to the administrator, the $2.2 billion identified so far is merely “the tip of the iceberg.”
