US Cancels 315,000 Obamacare Plans Covering 760,000 People
CMS canceled 315,000 Obamacare plans covering 760,000 people in August, citing unverified immigration documents and suspected improper enrollments.
The US Centers for Medicare & Medicaid Services (CMS) said it canceled 315,000 Obamacare health plans last month, affecting roughly 760,000 people, after flagging unverified citizenship or immigration documentation and suspected improper enrollments.
The action was disclosed in rule-making documents published in the Federal Register. The agency also said it will bar some 569 brokers who it claims submitted "statistically implausible rates of plan year 2026 applications" that lacked applicant information such as a social security number.
Under an emergency-style rule-making process that bypasses the usual advance notice-and-comment period, the administration has imposed an immediate, industry-wide freeze on new Obamacare broker registrations. Brokers without a 2026 registration will remain subject to the freeze until February 1, 2027.
CMS alleged that some brokers and agents enrolled people without genuine consent, changed plans without permission, used inaccurate information, or created questionable applications to collect commissions. Such activity, the agency said, can trigger improper federal premium-tax-credit payments and leave consumers facing surprise coverage changes, medical-bill problems, or tax issues.
The agency estimated that unauthorized enrollments could result in up to $6.6 billion in improper federal spending for the 2026 plan year.
The plans were created under the Affordable Care Act, which offers income-based subsidies. Republican President Donald Trump unsuccessfully sought to overturn the law in his first term and has proposed changes that would make the plans less comprehensive. Millions of people dropped coverage this year as rising medical costs and the expiration of extra COVID-era subsidies made monthly premiums unaffordable.
The National Association of Benefits and Insurance Professionals, a trade group representing health-insurance agents and brokers, criticized the blanket moratorium. Its president, Mychal Walker, said the move "would punish legitimate professionals instead of targeting the bad actors responsible for fraud." The association urged CMS to reconsider any moratorium and instead focus on targeted safeguards and enforcement that stop fraudulent activity while protecting consumers' access to legitimate, licensed agents and brokers.
A report by the US Department of Health and Human Services released earlier this year estimated that nearly half of new Obamacare enrollments between 2021 and 2024 may have been improper, phantom, or fraudulent. CMS said more than 1 million enrollees received coverage without providing a social security number.