A government task force led by Vice President JD Vance announced on Tuesday that it will remove 760,000 allegedly improper enrollments from the Affordable Care Act’s marketplaces. The move is the latest in the administration’s efforts to pare back health coverage in the name of rooting out fraud and abuse. But given the administration’s track record, there are reasons to view this announcement with a heavy dose of skepticism. And the consequences of erroneous disenrollments can prove devastating.
The White House Task Force to Eliminate Fraud is leading this extraordinarily large purge on the grounds that many of the enrollees do not exist or fail to meet eligibility requirements. The Centers for Medicare & Medicaid Services said hundreds of brokers and agents, who receive commissions per enrollee, have signed people up for marketplace plans without checking their eligibility. A June 2026 Department of Health and Human Services report found that “2.6 million improper and phantom enrollments … including over 1 million enrollments without a social security number.” Absent a Social Security number, neither one’s identity nor one’s eligibility for subsidies can be confirmed.
The Trump administration, ideologically inclined against consumer protection, has largely opted for piecemeal responses while leaving systemic failures in place.
“Administration officials said 40 agents and brokers generated 50,000 fake enrollments, costing the government $45 million,” The Wall Street Journal reported.
Ensuring that healthcare funds are directed to eligible individuals is a legitimate governmental objective. But crucially, “improper” and “phantom” are not synonymous. Conflating the two terms risks lumping actual fraud in with difficulty verifying eligibility.
Empowering brokers to directly enroll people can reduce administrative burden of plan enrollment, but can raise vulnerabilities to fraudulent actions when power is placed in the wrong hands. Notably, the first Trump administration helped empower the very brokers it now claims are fraudulently enrolling people. It expanded their role in offering consumers both non-Affordable Care Act and ACA-compliant plans, and it approved an “enhanced direct enrollment,” which let brokers process applications without the enrollee ever interacting with the healthcare marketplace.
While the second Trump administration is taking aim at perverse incentives that may have arisen, sweeping disenrollments ignore the failures of policy design. That is, when the previous Trump administration gave brokers more power as intermediaries when consumers enroll in insurance, the government failed to build a regulatory regime that would police their behavior. CMS’s decision to impose a moratorium on new agents and brokers may prove to be a Band-Aid solution to these perverse incentives.
In fact, the Trump administration reinstated 850 agents and brokers who had been suspected of engaging in fraudulent health insurance enrollment practices, highlighting yet another disconnect between the administration’s expressed policy preferences and their ultimate policy choices.
There are other reasons to suspect that the legitimate goal of rooting out fraud may ultimately harm consumers.
Inexcusable though fraudulent brokers and agents’ actions are, an appropriate response would not just penalize actors who are in the wrong (such as this) but also impose greater regulatory protection to prevent this in the future. The Trump administration, ideologically inclined against consumer protection, has largely opted for piecemeal responses (e.g., terminating problematic agents) while leaving systemic failures in place.
There are other reasons to suspect that the legitimate goal of rooting out fraud may ultimately harm consumers. Speaking on Tuesday, CMS Administrator Mehmet Oz characterized as “phantoms” those marketplace enrollees who have neither responded to government communication nor submitted a claim using their marketplace plans, and thus “don’t exist or had no idea they had coverage.”
Oz’s logic is flawed. To begin with, most marketplace enrollees live between 100% and 250% of the federal poverty level, and thus are low- or lower-middle income. With lower-income individuals are more likely to move with greater frequency, and if they failed to update their address, it is possible that the health insurance communication was not received. And with marketplace enrollees especially likely to work multiple jobs, there may be a greater chance that communication about a health plan — whether via voicemail or snail mail — will take a backseat to more urgent concerns, such as rent and groceries. Simply put, not all mail gets opened.
It is especially puzzling that Oz used the absence of a submitted claim as evidence that one need not remain enrolled in a marketplace health plan. By its very design, health insurance protects in part against unpredictable risks; its legitimacy does not depend on frequent use. In fact, people who pay premiums but don’t file claims are crucial to the healthcare system. This was the whole idea behind the ACA’s individual mandate: premiums for younger and healthier people, who rarely or never utilize their plans, make it easier for insurers to cover the millions of people with preexisting and/or expensive medical conditions.
Furthermore, several post-ACA policies have steered marketplace enrollees to lower-quality plans that are more costly to use. After Congress let enhanced ACA tax credits instituted during the pandemic expire last year, millions dropped their marketplace plans and insurers dramatically increased premiums to accommodate the less healthy pool of people who would remain insured. As a result, the popularity of the lowest-premium “Bronze” plans surged in marketplaces in 2026. But with an average deductible of nearly $7,500, it is little wonder why people would limit their healthcare use.
The administration also has worked to expand access to catastrophic health plans — that is, cheap, high-deductible plans (over $10,000 annually). When the average American cannot accommodate even $1,000 in unexpected medical expenses, it is no surprise if these plans go unused as well.
For Oz to cite lack of healthcare utilization as evidence of fraud is to miss the forest for the trees. The approach of Vance’s task force risks leaving enrollees vulnerable to coverage removal and will prove no substitute for better regulatory oversight or making healthcare plans cheaper to use. The ACA marketplace needs fixing, but mass disenrollment is not the appropriate cure.
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