Over a Million May Be Kicked Off Obamacare Under New Plan: Who’s Impacted? - Newsweek

The Trump administration said Tuesday it would remove more than 1 million people from Affordable Care Act marketplace coverage as part of what officials described as the largest anti-fraud crackdown in the program's history, arguing many people enrolled with the system had never knowingly signed up.

Speaking at a news conference as part of his anti-fraud efforts, Vice President JD Vance said the administration was stopping Obamacare registration for over 700,000 people who it believes are fraudulently enrolled, while Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mehmet Oz said some of those being removed from the program had "never filed a claim."

Republicans have long claimed that the ACA has been open to fraud and abuse, and there have been cases where this has been proven. The tougher approach from the Trump administration has raised concern, however, that eligible people will lose coverage.

"It is entirely possible that many of these people were enrolled without their knowledge or were so-called phantom enrollees," Cynthia Cox, senior vice president and director of the Program on the ACA at KFF, told Newsweek. "It is also entirely possible that many of these people were legitimately enrolled and simply did not respond in time. There is no way to know how many legitimately enrolled people had their plans canceled."

Newsweek reached out to CMS for further comment via its contact form Tuesday afternoon.

The administration says that the federal health insurance marketplace has become vulnerable to increasingly sophisticated fraud schemes that allow brokers and bad actors to enroll consumers without their knowledge, so those behind the efforts can then collect federal premium subsidies.

According to a fact sheet released by CMS on Tuesday, officials have identified hundreds of thousands of unauthorized enrollments and reported widespread evidence of eligibility problems, unresolved verification issues and suspicious enrollment patterns.

"We are stopping Obamacare enrollment for about 750,000 people, who we believe are fraudulently enrolled in the program," Vance said. "The second thing we're going to do is we're going to do some additional verification…on about 419,000 people. We're going to make sure that they're, first of all, legal residents of the United States of America, and second of all we're going to make sure they meet the income threshold requirements in order to receive these Obamacare benefits."

Oz highlighted consumers who had allegedly never used coverage that federal taxpayers were subsidizing, arguing this suggested many did not know they had been enrolled in the first place.

The administration argues that its efforts are necessary to protect taxpayers and preserve the long-term integrity of the marketplace, with CMS predicting around $2.2 billion in returned funds.

"The administration sent a list of about 1 million people who they suspected could be fraudulently enrolled to insurers. These were people who were enrolled by a broker or agent, had 100% of their premium payment coverage by the tax credit, and who had no SSN or had no immigration document that CMS was able to verify in real time," Cox said.

"Insurers were asked to try to make contact with those people and families. Insurers were allowed to filter out people who had a claim or had communicated with the insurer. If the enrollees did not make contact within 30 days of outreach, their coverage was canceled."

The government has presented substantial evidence of ongoing fraud risks within ACA marketplaces.

A 2026 Government Accountability Office (GAO) report outlined how undercover investigators were able to obtain subsidized ACA coverage using fictitious applicants, in a similar fashion to the allegations made by Vance and Oz Tuesday.

The GAO also identified tens of thousands of potentially unauthorized broker-of-record changes and noted CMS had received large numbers of complaints linked to unauthorized enrollments and plan switching.

Those findings provide support for the administration's broader view that marketplace fraud is a real problem, rather than a hypothetical one.

Dr. Oz's claim that a lack of health insurance claims from a large proportion of the flagged enrollees means they should be removed will likely draw the most criticism from those concerned about Americans and legal residents losing coverage.

A study conducted by Wakely Consulting Group for America's Health Insurance Plans in December 2025 found that enrollment records with no claims can be the result of numerous legitimate circumstances, including healthy consumers who never seek medical care, individuals only enrolled for part of the year, and claims processing and reporting delays.

The analysis found that short-term enrollees were especially likely to appear as nonusers of healthcare services.

Senator Chuck Schumer, the Senate Minority Leader, posted to X Tuesday criticizing the administration's reasoning, saying that with healthcare costs rising, kicking "hundreds of thousands more people off their health insurance" was not the answer.

"Senate Democrats will expand coverage and lower costs for millions of Americans when we take back the majority," Schumer said.

The ACA Marketplace, often referred to as the Obamacare exchange, was created under the Affordable Care Act of 2010, during President Barack Obama's first term, to allow individuals and families without employer-sponsored coverage to purchase private health insurance plans.

Consumers can compare plans, enroll in coverage, and, depending on income, qualify for federal premium subsidies that reduce the cost of insurance. The marketplace is for those who do not receive Medicare or Medicaid.

Marketplace enrollment has reached record levels in recent years. More than 24 million people selected ACA marketplace plans for 2026 coverage, according to federal government data.

The sharp growth has been fueled in part by enhanced premium subsidies that made plans more affordable for many consumers.

The enrollment increase has also led to the greater federal spending on premium assistance and heightened scrutiny from policymakers concerned about fraud and improper payments.

The administration says its focus is not on legitimate beneficiaries but on consumers who were improperly enrolled, received subsidies for which they were not eligible, or whose applications show signs of fraud.

Vance and Oz said the initiative is a way to save money, by reducing waste and protecting taxpayer dollars, rather than a specific funding transfer elsewhere, but over $2 billion could be saved, per the CMS announcement.

It was not immediately clear when enrollees would be removed from the marketplace.

CMS said there would be a moratorium on new broker registrations for 2027 who do not have an active Exchange Agreement for 2026, while the system is strengthened.