The Centers for Medicare & Medicaid Services (CMS) said on September 22 that it had cancelled about 315,000 enrollment records in the Affordable Care Act (ACA) insurance marketplace, affecting roughly 760,000 people. The agency said the action targets suspected improper enrollment and fraud and could reduce taxpayer-funded subsidies by about $2.2 billion.
CMS is also reviewing the eligibility of approximately 419,000 enrollees, focusing on whether they are lawful U.S. residents and whether their income falls within the threshold for ACA marketplace subsidies. Because premium assistance is tied to household size and projected annual income, the accuracy of enrollment and income information directly affects federal spending.
CMS Cancels 315,000 Marketplace Records
CMS has not said how many of the 315,000 cancelled records involved people who were clearly ineligible, nor how many had not completed eligibility checks. The information released so far does not show what specific issue was associated with each record.
The White House task force targeting fraud, led by Vice President JD Vance, pushed the cancellation effort. At a September 22 briefing, Vance said the system had paid insurance brokers to bring patients into the coverage system without sufficiently verifying whether those individuals qualified. He said that arrangement left room for improper enrollment.
CMS Administrator Mehmet Oz said at the same briefing that about 35% of people currently enrolled in Obamacare had “never used the plan.” He said they had neither used prescription drug services nor recorded a doctor visit.
Lack of use, however, does not by itself establish that someone was ineligible. One element of the ACA’s design is to bring healthier people who use fewer medical services into the risk pool, helping spread costs across the broader insured population. Enrollment records cannot be judged solely on the basis of healthcare utilization.
Pandemic-Era Subsidies Lifted Enrollment
The ACA, enacted during the Obama administration, created the Obamacare marketplace and provides subsidies to eligible households based on family size and projected income. Trump’s first administration did not repeal the law, although it proposed changes that could have reduced coverage under some plans.
Oz said federal healthcare spending rose sharply during the pandemic, and the subsidies available through the ACA marketplace created incentives for some improper activity. He said Obamacare enrollment had increased from about 10 million people before the pandemic to roughly 22 million afterward, adding that limited oversight and weak enforcement may have allowed some problematic records to remain in the system.
A June report from the Office of the Assistant Secretary for Planning and Evaluation at the U.S. Department of Health and Human Services described “unprecedented enrollment growth” in the ACA marketplace between 2021 and 2024. It said nearly half of enrollment records were suspected of involving improper, false or fraudulent activity. The report defined improper or fraudulent enrollment as misrepresenting income to obtain free coverage or related subsidies.
The rise in enrollment was linked in part to the American Rescue Plan, enacted in 2021 as a pandemic response. The law increased the subsidies available to consumers, allowing more households to afford ACA marketplace plans. The enhanced subsidies were later extended but are scheduled to expire at the end of 2025, leaving many ACA enrollees facing higher premiums.
Savings Estimate Depends on Eligibility Reviews
About 19.2 million people are currently enrolled in Obamacare plans in the United States. If CMS’s estimated $2.2 billion in savings is realized, it would directly reduce federal spending on ACA subsidies. The final amount will depend on how many cancelled records were actually ineligible and on the results of the ongoing eligibility reviews.
The action comes as the Trump administration expands investigations into fraud in U.S. public healthcare programs and tightens funding and eligibility conditions for Medicaid, the jointly administered federal-state program. CMS has not yet released the specific cancellation reasons for each category of record, a review timetable or details on whether affected individuals can restore their coverage. Those details will determine the effect of the enforcement effort on federal subsidy spending and on the healthcare coverage of the people involved.