White House Targets Fraud in ACA to Save $2.2 Billion

CMS has canceled approximately 315,000 Affordable Care Act Marketplace enrollments covering more than 760,000 people, marking a major expansion of federal efforts to stop unauthorized enrollment and improper subsidy payments.

ACA Fraud Crackdown Moves From Investigation to Cancellations

The Centers for Medicare & Medicaid Services said the cancellations took effect August 31, 2026, after CMS and participating health insurers reviewed the enrollments and determined they were unauthorized. The agency expects approximately $2.2 billion in advance premium tax credit payments associated with the canceled enrollments to be returned or recovered.

Vice President JD Vance, who chairs the White House Task Force to Eliminate Fraud created in March, announced the enforcement effort publicly on September 22. Administration officials also said another 419,000 enrollments will undergo additional verification to determine whether the individuals remain eligible for Marketplace assistance.

“We’re actually making sure that the people receiving Obamacare subsidies are actually entitled to receive them.”

The scale matters for the insurance industry. Roughly 19.2 million people were actively enrolled in ACA Exchange plans in early 2026. That means even a relatively small percentage of questionable or unauthorized enrollments can involve hundreds of thousands of consumers, substantial federal subsidies and significant operational work for carriers, agencies and regulators.

Agent and Broker Oversight Is a Central Part of the Response

CMS is not limiting its response to removing enrollments. Since January 2026, the agency says it has sent termination notices to more than 200 agents and brokers it identified as noncompliant. During the summer, CMS issued 569 notices of intent to terminate Exchange Agreements involving agents and brokers that submitted 2026 applications without identifying information such as Social Security numbers. Of the first 100 cases to complete the response period, 66 had already received termination notices when CMS released its September update.

CMS has also imposed a temporary moratorium affecting Plan Year 2027 registration. The restriction applies to agents and brokers who do not already have an active Exchange Agreement for 2026. Industry group NABIP said those producers will be unable to complete 2027 registration until February 1, 2027, unless CMS lifts the moratorium earlier.

The agency says newly registered 2026 agents and brokers account for a disproportionate share of several risk indicators. Compared with producers registered before 2026, their agent-assisted enrollments were 2.8 times more likely to have unresolved income verification issues, 2.7 times more likely to lack Social Security numbers and 2.6 times more likely to have unresolved citizenship or immigration verification issues. These indicators are not themselves proof that every affected enrollment is fraudulent, but CMS is using the patterns to identify areas requiring tighter controls.

New Verification Requirements Change the Enrollment Workflow

For legitimate agencies, some of the most important developments are procedural. CMS says existing agents and brokers must complete identity proofing again through Login.gov or ID.me. Agent-assisted applications must include verifiable Social Security numbers or immigration document numbers for non-newborn applicants, and CMS is restricting agents from being added to applications that consumers are completing independently through HealthCare.gov.

CMS also plans to require electronic consumer authorization before an agent or broker can take action on an application or enrollment. For agencies accustomed to phone-based authorization, lead transfers or high-volume enrollment systems, stronger documentation of consumer intent is increasingly becoming part of the compliance infrastructure rather than simply a best practice.

The Fraud Problem Predates the Latest Enforcement Action

Unauthorized Marketplace activity has been an issue across administrations. In 2024, CMS reported receiving 90,863 complaints involving plan changes allegedly made without consumer consent and 183,553 complaints involving consumers allegedly enrolled without consent between January and August of that year. CMS also suspended 850 agents and brokers from June through October 2024 based on reasonable suspicion of fraudulent or abusive conduct related to unauthorized enrollments or plan switches.

A July 2026 Government Accountability Office review found that consumer complaints tied to confirmed unauthorized enrollments and plan switches increased more than fourfold from 2023 through 2025. GAO also identified at least 160,000 federal Marketplace applications in Plan Year 2024 with likely unauthorized changes by agents or brokers.

GAO concluded that existing controls did not consistently prevent unauthorized activity and recommended stronger mechanisms to verify consumer consent, restrict access to Marketplace records and notify consumers when agents or brokers take actions involving their enrollment. One approach examined by GAO was the use of one-time passcodes similar to controls already used by some state-based Marketplaces. HHS agreed with GAO's recommendations.

Identity and Subsidy Controls Remain Another Vulnerability

Separate GAO work released in December 2025 demonstrated weaknesses in advance premium tax credit controls. The federal Marketplace approved subsidized coverage for all four fictitious applicants GAO submitted for Plan Year 2024, and 18 of 20 fictitious applicants submitted for Plan Year 2025 remained actively covered as of September 2025. GAO emphasized that the covert testing was illustrative and could not be generalized to the entire Marketplace population.

GAO's data analysis also identified more than 58,000 Social Security numbers receiving advance premium tax credits in Plan Year 2023 that matched Social Security Administration death data. In two categories representing roughly 26,000 of those matches, GAO calculated more than $94 million in associated advance premium tax credit payments. A death-data match is a fraud-risk indicator rather than automatic proof of fraud, because identity errors and other circumstances can also create discrepancies.

Technology is increasingly part of the oversight process as well. CMS has maintained a machine-learning use case designed to identify suspicious agent and broker behavior in Marketplace applications and enrollments. At the same time, the latest enforcement measures emphasize basic controls such as identity proofing, verifiable identifiers, documented authorization and carrier cooperation, reinforcing that sophisticated analytics still depend on reliable enrollment data.

What the Changes Mean for Agencies and Carriers

For insurance organizations, the immediate issue is less about political debate over the ACA and more about operational readiness. Enrollment records, consumer consent, producer access and data verification are becoming more closely connected to program-integrity enforcement.

• Agents: Complete required identity proofing, maintain clear consumer authorization records and prepare for electronic consent requirements before Open Enrollment.
• Agencies: Review lead sources, enrollment permissions, producer access and oversight of newly contracted agents, particularly where applications are submitted at high volume.
• Carriers: Expect continued coordination with CMS around suspicious enrollments, consumer contact, subsidy reconciliation and investigations of unauthorized activity.
• Compliance teams: Watch federal and state guidance closely as CMS expands data sharing with state insurance departments and the National Association of Insurance Commissioners.

These changes could also affect recruiting and distribution strategy. Agencies planning to bring new producers into the federal Marketplace for Plan Year 2027 may need to account for the registration moratorium, while carriers may place greater emphasis on producer history, application quality and verification patterns when evaluating distribution relationships.

Industry Support for Fraud Controls Comes With Concerns About Implementation

There is broad agreement among regulators, consumer advocates and insurance organizations that unauthorized enrollments should be prevented. The dispute centers more on how questionable enrollments are identified, how quickly enforcement occurs and what safeguards exist for consumers and legitimate producers caught in the process.

NABIP has said it supports efforts to prevent fraud and unauthorized enrollment but has raised concerns about the scope and timing of the registration moratorium, arguing that restrictions should be targeted so legitimate licensed professionals can continue helping consumers obtain coverage.

“I think there’s no question that somebody who was fraudulently enrolled should have their coverage canceled.”

Cox also questioned whether the process used to identify the canceled enrollments could reliably distinguish every fraudulent enrollment from a legitimate one. That distinction will matter to agents and carriers if consumers contact them after discovering that coverage or financial assistance has changed.

Consumer Appeals May Become Part of the Agent Conversation

Marketplace consumers generally have 90 days from an eligibility notice to appeal decisions involving eligibility to purchase Marketplace coverage, eligibility for premium tax credits or the amount of financial assistance they receive. The date on which Marketplace coverage ends is not itself among the decisions that can normally be appealed through the Marketplace eligibility process, so the correct remedy depends on what decision produced the loss of coverage.

Consumers who file eligible appeals may in some circumstances be permitted to maintain coverage or financial assistance while the appeal is pending, although they generally must continue paying required premiums. Insurance professionals assisting affected clients will therefore need to distinguish between Marketplace eligibility disputes, insurer coverage decisions and enrollment corrections rather than treating every cancellation as the same type of case.

What to Watch as Open Enrollment Approaches

The next phase will show how these controls work at scale. CMS says it will provide agents and brokers with training and communications on the new requirements before Open Enrollment while continuing to coordinate with health insurers, state regulators and the NAIC. The additional verification involving hundreds of thousands of enrollments could also provide a clearer picture of how many questionable records represent intentional fraud, unauthorized broker activity, eligibility problems or other data discrepancies.

For agencies and carriers, the broader takeaway is that Marketplace program integrity is moving deeper into the enrollment workflow. Identity verification, consumer authorization, producer accountability and carrier data are increasingly being used together rather than as separate compliance functions. That makes accurate documentation and controlled access especially important as the industry prepares for the next enrollment cycle.

The enforcement effort may ultimately be measured on two tracks: whether it successfully reduces unauthorized enrollments and improper subsidy payments, and whether the verification process can do so without disrupting coverage for eligible consumers or limiting access to legitimate professional assistance. Both questions will remain important for insurers and producers as the new controls take effect.