CMS Pulls 760,000 People Off Obamacare, Citing Fraud, Claims $2.2 Billion in Savings

The Trump administration says it found a lot of people on Obamacare who don't actually exist. On September 22, Vice President JD Vance and CMS Administrator Dr. Mehmet Oz announced the removal of roughly 760,000 Affordable Care Act marketplace enrollees, saying the purge will save taxpayers $2.2 billion in improper federal subsidies this year, according to CNN.

Oz told Fox News Digital the accounts were "phantom" — no claims filed, no responses to CMS outreach, in many cases no verifiable Social Security number. Oz said CMS found 1.1 million enrollees lacking a Social Security number altogether, and that the 760,000 terminated accounts were canceled because "American taxpayers should not be paying fraudulent brokers to lie about people who don't exist, collect premiums and run away with the money."

Another 419,000 enrollees face additional verification, including income and legal-residency checks, Vance said. CMS also froze new broker registrations on HealthCare.gov through February 1, 2027, and has sent termination notices to more than 200 agents and brokers since January, according to Healthcare Dive.

How CMS Decided Who's Real

Cynthia Cox, director of the ACA program at KFF, a nonpartisan health research organization, told NPR the agency sent a list of roughly 1 million names to insurers and asked them to contact those enrollees. Anyone who didn't respond within 30 days got canceled. Cox said that process can catch real people along with fraudsters. "There could have been collateral damage here," Cox said, noting that healthy people who never filed a claim, or who simply missed an email or voicemail, could have been swept up in the cuts.

NPR's Selena Simmons-Duffin reported that CMS did not respond to questions about its verification process or what happens when mistakes occur. Carolina Public Press reported that CMS also declined to say how many North Carolina residents were affected, and the state's own health department said it doesn't track ACA marketplace enrollment and has no idea either. For a program being credited with saving $2.2 billion, CMS has released remarkably little about how it identified the 760,000 names.

Healthcare Dive reported that the scope of the fraud itself is contested. The administration's case leans partly on research from a conservative think tank claiming millions of ACA members generate zero claims, letting insurers collect subsidies for phantom enrollees. Health policy experts and the insurance industry dispute how big that number actually is, though other research does confirm fraud exists on some scale.

Data backs up at least part of CMS's targeting. Although new brokers make up just 11% of all agents, they accounted for 30% of compliance-related terminations for the 2026 plan year and were more likely to omit required details like Social Security numbers, according to CMS data cited by Healthcare Dive.

Not a New Problem, Politically Loaded Timing

Broker fraud isn't new. The Biden administration suspended 850 agents and brokers for suspected fraud in 2024 after enhanced subsidies, passed in 2021, made coverage more generous and created bigger incentives for bad actors, CNN reported. CNN also noted that Trump officials later quietly reinstated several hundred of those suspended brokers, a detail that undercuts any claim that this administration invented the fight against broker fraud from scratch and raises its own question about why brokers flagged under one administration got cleared under the next.

The crackdown lands ahead of the November midterms, as Republicans try to show voters they're tackling healthcare fraud in Medicaid, Medicare and the ACA simultaneously. Democrats, meanwhile, are hammering the GOP over the expiration of enhanced ACA subsidies at the end of 2025 and Medicaid cuts in Trump's tax and spending law, both of which are projected to push millions off coverage in coming years.

The Fraud Fix Doesn't Touch Affordability

Even CMS's own framing admits this crackdown doesn't solve the bigger cost problem. Louise Norris, a health insurance analyst for healthinsurance.org, told Carolina Public Press that "the actions to address fraud do nothing to help the millions of real enrollees whose coverage is much less affordable than it used to be." In North Carolina, premiums are projected to rise another 15% in 2027, on top of last year's spike. Enrollment nationally already dropped from 21.8 million to 19.2 million between last year and this past February, per CNN, and North Carolina's marketplace enrollment alone fell 22% year over year.

Treasury has started mailing $500 refund checks to roughly 1 million Americans along with a letter from President Trump blaming the Biden administration for "overcharging taxpayers" to fund HealthCare.gov, according to Fox News Digital. Kevin Mayeux, CEO of the National Association of Insurance and Financial Advisors, called the broker registration freeze "a blunt and inappropriate response to a problem CMS admits is concentrated," warning it could lock out legitimate new brokers during open enrollment. AHIP spokesman Chris Bond said insurers support stronger fraud protections generally, calling fraud "never acceptable."

Whether CMS will ever publish the methodology behind the 760,000 terminations, or state-by-state breakdowns, remains unclear. Outside researchers like KFF have sought to independently verify how many of those accounts were truly fraudulent versus real enrollees caught by a 30-day deadline they never saw.