Trump Admin Cancels $2.2B In Phony Obamacare Enrollments

The Trump administration’s latest action to root out waste, fraud, and abuse in the Obamacare Exchanges entailed disenrolling people from insurance plans — costing taxpayers billions — who couldn’t identify themselves with proper documentation.

It’s the kind of move that would prompt ordinary taxpayers in the heartland to ask: Why didn’t they do that sooner?

Ghost Enrollees

In a fact sheet, the federal Centers for Medicare and Medicaid Services (CMS) announced it had “canceled approximately 315,000 enrollments covering over 760,000 individuals after confirmation that these enrollments were unauthorized.” The action, taken after investigations in coordination with insurance companies, will result in approximately $2.2 billion in Obamacare subsidies being refunded to the federal government.

At the same time, CMS announced it had sent “569 notices of intent to terminate Exchange Agreements to agents and brokers that submitted 2026 applications [for coverage] without identifying applicant information, such as a Social Security number.” It said 66 of those agents and brokers had already been terminated, and more will likely follow as CMS receives responses from the relevant parties.

Questionable Enrollment Persists

CMS also published an interim final rule (i.e., one taking effect immediately) imposing a six-month moratorium on the new registration of brokers and agents, allowing CMS to implement another round of program integrity measures to guard against fraud by agents and brokers. (The moratorium will not apply in states that run their own Exchanges, which set their own rules regarding insurance brokers.) The move caused some pushback from the broker community, which said this punishes the innocent with the guilty since no new broker will be able to register until next February, after the open enrollment period for 2027.

In response, CMS cited data indicating that new agents for the current (i.e., 2026) plan year had significantly higher rates of questionable enrollment — for instance, a 2.8-time higher rate of “unresolved income verification issues,” a 2.7-time higher rate of “missing Social Security numbers,” a 2.6-time higher rate of “unresolved citizenship or immigration status verification issues,” and a 1.4-time higher rate of dual enrollment in Exchange coverage and Medicaid. To CMS, these data points suggest that new brokers may be disproportionately seeking to enroll ineligible individuals primarily for the commissions, and justified the registration moratorium as a preventive measure.

Prior Government Audit

While taking action to prevent fraud is always welcome, did these particular steps come too late? CMS’s latest announcement raises questions about when and why brokers are being terminated or reinstated.

Specifically, an audit released by the Government Accountability Office (GAO) last December addressed this issue. It noted that, in October 2024, CMS “suspended 850 agents and brokers from the federal Marketplace [i.e., Exchange] for reasonable suspicion of fraudulent or abusive conduct related to unauthorized enrollments or unauthorized plan switches. However, in May 2025, CMS officials told us that the agency reinstated all these suspended agents and brokers to better fulfill the agency’s statutory and regulatory procedures.” 

It isn’t clear why CMS reinstated the brokers last May and whether any of the reinstated brokers were among those who received new termination notices over the summer. But the reinstatements came at a time when the federal government continued to struggle with program integrity efforts.

The recent interim final rule noted that in 2025, CMS received approximately 300,000 “complaints attesting to unauthorized enrollments or unauthorized plan switching.” A separate GAO report, released in July, disclosed a total of 299,604 such complaints last year — an increase from 258,424 in 2024. Thankfully, CMS said in the interim final rule that these trends have reversed in 2026. But given the persistence of eligibility fraud through 2025, CMS should make its reasoning behind last year’s broker reinstatements and this year’s subsequent terminations clear — and if it doesn’t, Congress should ask those questions on behalf of the American people.

As last year’s GAO report noted, a total of 19 of 20 fictitious enrollees were able to obtain subsidized coverage from the federal Exchange. Taxpayers should find that unacceptable, and most ordinary Americans would, regardless of political party. It’s why Washington should continue digging into fraud and demanding accountability. We the people deserve no less.