Trump administration removes 760,000 from Obamacare over alleged fraud

The administration says the move will save $2.2 billion, while health policy experts warn that legitimate enrollees could also be caught in the crackdown.

The Trump administration is removing roughly 760,000 people from Affordable Care Act health insurance plans, alleging that the enrollees were either ineligible for coverage or did not actually exist.

Vice President JD Vance announced the move Tuesday as part of an administration-wide effort to combat what officials describe as widespread fraud in federal health programs. Vance, who leads the White House Task Force to Eliminate Fraud, said the cancellations are expected to save taxpayers approximately $2.2 billion.

“We’re actually making sure that the people receiving Obamacare subsidies are actually entitled to receive them,” Vance said.

According to The New York Times, the administration identified roughly 750,000 enrollees it considers either ineligible or “phantom” participants. The group represents about 4% of the roughly 19 million people enrolled through ACA marketplaces.

The administration says some people were enrolled without their knowledge, while others did not meet income or immigration-status requirements. Officials have also focused on insurance brokers, who receive commissions for signing people up for coverage.

Centers for Medicare and Medicaid Services Administrator Mehmet Oz announced a six-month moratorium on new ACA insurance brokers, saying fraudulent activity was disproportionately connected to brokers.

The administration is also reviewing another 419,000 enrollments for eligibility.

But the distinction between fraud and mistakes is at the center of concerns raised by health policy experts. Cynthia Cox, director of the ACA program at KFF, told The Times that there is “widespread agreement” that unauthorized enrollments should be canceled, but questioned whether all of the people targeted were actually unauthorized.

“The question is whether these were all indeed unauthorized enrollments and whether this was the appropriate process for determining whether an enrollee was legitimate or not,” said Cox.

Ellen Montz, who previously oversaw the ACA marketplaces during the Biden administration, similarly warned that legitimate consumers could be affected.

“I would absolutely foresee that totally legitimate enrollments are going to get cut off here,” Montz said.

The administration says people who were legitimately enrolled can have their coverage reinstated by providing additional documentation, including a Social Security number.

The crackdown comes as ACA enrollment has already declined amid higher premiums following the expiration of enhanced federal subsidies. The administration’s move could further affect people who rely on marketplace coverage, particularly lower-income Americans.

The White House maintains that the effort is about ensuring taxpayer-funded subsidies go only to people who qualify. But the debate over how the administration identified fraudulent enrollment—and whether legitimate consumers could lose coverage in the process—is likely to continue as the ACA marketplace prepares for another enrollment season.