Vice President JD Vance has announced a major crackdown on what the Trump administration describes as widespread fraud in the Obamacare health insurance system.
The administration has begun removing roughly 760,000 people from Affordable Care Act coverage and plans to place hundreds of thousands of additional enrollees through eligibility reviews.
The action is part of a broader campaign by Vance’s White House Task Force to Eliminate Fraud, which is targeting alleged abuse across taxpayer-funded programs.
Speaking Tuesday, Vance said investigators had uncovered what he called a major fraud scheme involving insurance brokers.
“We found a fraud ring that had 40 brokerage agents who had funneled 50,000 people into the Obamacare system fraudulently,” Vance said.
“Many of those people quite literally didn’t even exist. We had a system in this country that rewarded brokers, that made people rich for enrolling fake people in programs that are meant to ensure that our fellow citizens have health care. This was a scandal,” he added.
The administration estimates that the latest measures will block approximately $2.2 billion in federal subsidy payments.
Vance was joined by Health and Human Services Secretary Dr. Mehmet Oz, who said investigators found questionable enrollments involving individuals officials were unable to verify or, in some cases, contact.
“Many of those people quite literally didn’t even exist. We had a system in this country that rewarded brokers, that made people rich for enrolling fake people in programs that are meant to ensure that our fellow citizens have health care. This was a scandal,” Vice President JD Vance said.
Dr. Oz also announced a six-month pause on new Obamacare broker and agent registrations as the administration investigates suspicious enrollment activity.
Signed into law in 2010, Obamacare was created to expand access to affordable health coverage. About 23.1 million Americans now have coverage through the ACA Marketplace.
“Fraud will destroy Obamacare,” Oz said, arguing that insurers cannot operate effectively unless they know who is actually receiving coverage.
Oz also announced a six-month freeze on new registrations for Obamacare brokers and agents while officials examine suspicious enrollment patterns.
The Centers for Medicare & Medicaid Services said it canceled approximately 315,000 ACA policies in August, affecting about 760,000 people.
CMS cited unverified citizenship or immigration status, along with suspected fraudulent enrollments, among the reasons for the cancellations.
The agency is also taking action against brokers accused of helping facilitate improper enrollments.
CMS issued 569 notices of intent to terminate Exchange agreements with agents and brokers whose application patterns officials called “statistically implausible.” The applications included missing key identifying details, such as Social Security numbers.
An additional roughly 419,000 enrollees are undergoing eligibility reviews, including checks of their income and legal status.
The administration estimates that improper enrollment activity could cost the federal government as much as $6.6 billion during the 2026 plan year. Officials expect the latest cancellations to save approximately $2.2 billion.
The crackdown comes amid wider scrutiny of enrollment practices in the Affordable Care Act marketplace.
A recent HHS report estimated that millions of enrollments may have been improper, phantom or fraudulent, including more than 1 million enrollments without a Social Security number.
Federal prosecutors have also pursued individual cases involving alleged ACA fraud.
Earlier this year, the Justice Department announced that AP of South Florida, LLC (APSF) had agreed to plead guilty to its role in an enrollment fraud scheme that resulted in the federal government awarding $141.5 million in unwarranted subsidies.
The company admitted that employees knowingly submitted fraudulent applications on behalf of thousands of consumers.
APSF agreed to pay $27.6 million in restitution, while its former parent company, AssuredPartners, Inc., agreed to pay $107 million to resolve related civil allegations.
