US Officials Canceled 315,000 Obamacare Plans Last Month Over Suspected Fraud

The Centers for Medicare & Medicaid Services said it canceled approximately 315,000 Affordable Care Act Marketplace enrollments on August 31, affecting more than 760,000 people. CMS said the cancellations involved enrollments it confirmed as unauthorized after reviews with insurers, including cases involving unverified citizenship or immigration documentation and situations in which insurers could not identify claims or establish contact with consumers. The agency expects the cancellations to return roughly $2.2 billion in advance premium tax credit payments.

CMS Says the Enrollments Were Unauthorized

The administration has described the cancellations as part of a broader effort to remove fraudulent and improper enrollments from the federal Marketplace. CMS says it is working with insurers to investigate potentially unauthorized policies and cancel those it confirms were unauthorized, rather than simply removing every enrollment under suspicion. Officials have also said some people may have been enrolled by agents or brokers without their knowledge.

More Than 760,000 People Were Affected

The 315,000 canceled enrollments represented more than 760,000 individuals because each Marketplace enrollment can cover multiple people under a policy. The administration says another 419,000 enrollments will undergo additional verification to determine whether the people covered are eligible for the program. That means the latest action is part of a larger review that could affect more people as verification continues.

The Government Expects Billions in Subsidies to Be Recovered

CMS estimates that canceling the unauthorized enrollments will result in the return of approximately $2.2 billion in advance premium tax credits. Those credits are federal subsidies that help eligible Marketplace customers pay their monthly insurance premiums. The agency says it will also continue pursuing the recovery of subsidy payments associated with other unauthorized enrollments identified through its investigations.

Brokers Are Facing New Scrutiny

CMS also announced enforcement actions involving agents and brokers that assisted consumers with Marketplace enrollment. The agency said it has issued termination notices to more than 200 non-compliant agents and brokers since January 2026, while 569 additional agents and brokers received notices of intent to terminate after submitting 2026 applications at statistically implausible rates without identifying information such as Social Security numbers. CMS said 66 of those 569 had already received termination notices after their response periods ended.

New Broker Registrations Are Being Temporarily Restricted

CMS is also imposing a temporary moratorium on new agent and broker registrations for the 2027 plan year for people who did not have an active Exchange Agreement for 2026. The agency says its data show that agents and brokers who first registered for the 2026 plan year made up a small share of broker-assisted enrollments but accounted for a disproportionate share of unauthorized enrollments and other high-risk activity. Existing agents and brokers will also have to complete identity verification through Login.gov or ID.me under the new requirements.

The Crackdown Comes After Years of Enrollment Concerns

Concerns about unauthorized Marketplace activity did not begin with the latest cancellations, as CMS has previously documented complaints from consumers who said insurance plans were changed or created without their permission. In a 2025 rulemaking document, CMS said it had received 90,863 complaints from January through August 2024 involving unauthorized plan switches. The agency has argued that the availability of heavily subsidized or zero-premium plans created incentives for some third parties to enroll consumers improperly, sometimes without the consumer’s knowledge.

Experts Question How the Cancellations Were Identified

The administration’s fraud concerns have received support from some experts, but questions have also been raised about how the government identified the people whose coverage was canceled. Cynthia Cox of KFF told the Associated Press that people who were fraudulently enrolled should have their coverage canceled, while questioning whether the process used to identify the affected individuals was appropriate and whether every person removed was actually improperly enrolled. The Associated Press also reported that some health policy experts are seeking more transparency about the evidence behind the cancellations.

Millions Still Rely on ACA Marketplace Coverage

The federal Marketplace had roughly 19.2 million active enrollees as of early 2026, according to the Department of Health and Human Services. Enrollment expanded substantially during the COVID-19 pandemic after enhanced subsidies became available through legislation including the American Rescue Plan Act and Inflation Reduction Act. The latest cancellations therefore affect a portion of a much larger insurance program that continues to provide coverage to millions of Americans.

What the Latest ACA Fraud Crackdown Means

The administration says the crackdown is intended to ensure that federal subsidies go only to people who are eligible and to stop unauthorized activity by agents and brokers. At the same time, the cancellation of coverage creates an important distinction between people the government has confirmed were improperly enrolled and the additional group undergoing verification, while outside experts continue to question the transparency of the process. CMS says its review will continue, meaning more cancellations, subsidy recoveries and enforcement actions could follow as the agency investigates potentially unauthorized Marketplace activity.