The Trump administration is halting Obamacare coverage involving more than 760,000 people after the Centers for Medicare & Medicaid Services (CMS) identified suspected unauthorized and improper enrollments. The action is part of a broader federal effort to reduce fraud and recover taxpayer-funded subsidies.
According to a report by Reuters, CMS canceled approximately 315,000 Affordable Care Act health plans in August, covering about 760,000 individuals. The agency cited unverified citizenship or immigration documentation and suspected improper enrollments.
What Happened
CMS said the canceled plans involved people enrolled with assistance from agents or brokers where citizenship or immigration documentation could not be verified. In some cases, insurance issuers were unable to identify claims or establish contact with the consumers.
The cancellations are expected to return approximately $2.2 billion in advance premium tax credit payments to the federal government, according to CMS.
The administration’s action is being led in part by Vice President JD Vance’s anti-fraud effort. Vance said the cancellations were intended to prevent taxpayer-funded subsidies from being directed toward unauthorized or improper enrollments.
CMS Targets Broker Activity
CMS is also taking action against insurance agents and brokers involved in questionable enrollment activity.
The agency issued 569 notices of intent to terminate Exchange agreements involving brokers who submitted what CMS described as statistically implausible numbers of 2026 applications without key applicant information, including Social Security numbers.
Since January 2026, CMS has also issued termination notices involving more than 200 agents and brokers identified as non-compliant.
CMS has attributed some of the suspected misconduct to unauthorized enrollments, unauthorized plan changes, inaccurate application information and other practices that could result in improper premium tax credit payments.
New Broker Registration Freeze
Alongside the cancellations, CMS introduced a temporary moratorium on new registrations for certain agents and brokers seeking to participate in the federally facilitated Marketplace for the 2027 plan year.
The Federal Register says the pause applies to agents and brokers that do not have a Plan Year 2026 Exchange agreement with CMS. The moratorium is scheduled to remain in place until February 1, 2027, unless it is lifted earlier.
CMS said the measure is intended to give the agency time to implement stronger safeguards against unauthorized enrollment activity and misuse of consumer information.
Scope of the Suspected Fraud
Federal records show that CMS has received a substantial number of complaints involving unauthorized Marketplace enrollments and plan switching.
The agency reported more than 624,000 consumer complaints involving unauthorized enrollments or plan changes between 2023 and 2025, with approximately 300,000 complaints received in 2025 alone.
CMS also cited concerns about applications containing inaccurate income information, which can affect eligibility for Medicaid, the Children’s Health Insurance Program and premium tax credits.
The agency has estimated that unauthorized enrollments could potentially result in as much as $6.6 billion in improper federal spending during the 2026 plan year.
Impact on Obamacare Coverage
The cancellations come as the Affordable Care Act Marketplace enters a period of significant change. Enhanced pandemic-era subsidies have expired, while insurers and consumers are facing changes in healthcare costs and federal policy.
CMS said its enforcement actions are intended to distinguish legitimate consumers from unauthorized enrollments while protecting the integrity of the federal Marketplace.
At the same time, industry representatives have raised concerns that broad restrictions on brokers could affect legitimate consumers who rely on agents for assistance with choosing and maintaining health insurance coverage. The National Association of Benefits and Insurance Professionals has criticized the registration freeze and called for targeted enforcement instead.
What Happens Next
CMS said it will continue working with insurers to investigate potentially unauthorized enrollments, cancel those confirmed to be improper and recover associated premium tax credit payments.
The agency is also expected to continue investigating agents and brokers whose enrollment activity raises compliance concerns.
For consumers, the federal crackdown could lead to additional verification requirements as CMS attempts to ensure that Marketplace coverage and subsidies are tied to eligible individuals.
The broader effort places fraud prevention and program integrity at the center of the administration’s approach to Obamacare, while its effects on legitimate enrollment and access to coverage will become clearer as the 2027 enrollment period approaches.
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CMS said the plans involved suspected unauthorized enrollments, including cases with unverified citizenship or immigration documentation.
CMS estimates the cancellations could return approximately $2.2 billion in advance premium tax credit payments to the federal government.