CMS Takes Action Against Fraud in Health Insurance Marketplace

The Centers for Medicare & Medicaid Services (CMS) is taking decisive action to improve integrity and reduce fraud in the Federal Health Insurance Marketplace® by canceling approximately 315,000 unauthorized enrollments.

This significant move will affect over 760,000 individuals and is projected to recover around $2.2 billion in taxpayer-funded subsidies. CMS has initiated a comprehensive response to combat fraud, forming a coordinating group within the Federally-facilitated Exchange (FFE) in collaboration with the U.S. Department of Health and Human Services (HHS). The group regularly convenes to focus on enforcement and maintaining program integrity, reflecting a robust commitment to safeguard public funds.

Enhancing Marketplace Oversight

The strategic approach involves rigorous measures to prevent improper enrollments and enhance oversight of agents and brokers involved in the Exchanges. CMS has been working closely with insurers to identify, investigate, and terminate unauthorized enrollments while reclaiming taxpayer-funded subsidies. These efforts include issuing termination notices to more than 200 non-compliant agents and brokers since January 2026, and sending 569 notices of intent to those who submitted incomplete 2026 applications.

“CMS is strengthening safeguards, pursuing bad actors, and holding agents and brokers accountable when they break the rules.”

Agent and Broker Accountability

Data reveals that a significant portion of unauthorized enrollments can be traced back to agents and brokers who comprise a small percentage of total enrollments but impact the system disproportionately. To address this, CMS has placed a temporary moratorium on new registrations for agents and brokers without an active Exchange Agreement for 2026, aiming to curtail potential vulnerabilities in the registration process.

In summary, the CMS initiatives are crucial for reinforcing the integrity of the Marketplace, ensuring accountability among its participants, and safeguarding both consumers and taxpayers from unauthorized activities.