Vice President JD Vance and administration officials on Tuesday announced that they are removing about 760,000 enrollees from Affordable Care Act coverage, saying that they were fraudulently enrolled in the government health program.
Speaking at a White House press briefing, Vance said that officials would perform “additional verification” on about 419,000 people that they suspected to be fraudulently enrolled, too. The administration also is suspending some brokers found to have wrongly signed up enrollees for ACA coverage.
Officials said that the moves would collectively save $2.2 billion in federal spending. The White House anti-fraud task force, which is led by Vance, is working with the Department of Health and Human Services and the Centers for Medicare and Medicaid Services on the crackdown.
“This is what the fraud task force is all about,” Vance said, flanked by CMS Administrator Mehmet Oz and other senior officials. “Saving the American taxpayers money, and on the other hand, ensuring that these programs that are very important” are protected from waste and fraud.
Oz said that the fraudulent enrollees were identified based on their lack of healthcare use and other factors, and that officials concluded many were fictitious. He also announced a six-month moratorium on allowing new insurance brokers to sell ACA plans.
The cuts affect people who enrolled in coverage through healthcare.gov, the federally run ACA marketplace. The Affordable Care Act allowed states to create their own marketplace or use the federal marketplace, healthcare.gov.
Pennsylvania and New Jersey are among 21 states that operate their own marketplaces. The District of Columbia also operates its own ACA marketplace.
A spokesperson for Pennie said people who enroll in coverage through Pennsylvania’s ACA marketplace are not affected.
The Wall Street Journal first reported the administration’s push to remove the ACA enrollees and suspend some insurance brokers. Administration officials told the Washington Post earlier this year that the anti-fraud task force was examining the issue of ACA enrollment fraud.
About 19 million people are enrolled in health plans offered through the ACA’s exchanges, HHS officials said in June. Enrollment in the program, which shot up under President Joe Biden, has shrunk by more than 1 million people since President Donald Trump took office and is expected to fall by millions more this year.
Vance and the anti-fraud task force have targeted healthcare programs in their push to trim federal spending by billions of dollars. Vance and Trump have also long criticized the ACA, a sweeping health law established by then-President Barack Obama and Democrats in 2010. The law’s expansion of health coverage is credited with driving the nation’s uninsured rate to historic lows, and past GOP efforts to target the program helped Democrats win back seats in Congress.
Democrats and some health policy experts have argued that Trump’s polices, including ending pandemic-era subsidies that widely lowered the cost of ACA coverage, have forced people off the program and put them at risk of losing access to care.
Jason Levitis, who was a senior Treasury Department official in the Obama administration, during which he helped craft and implement ACA policies, credited Trump officials for taking steps to confront fraud in the program. But he criticized Tuesday’s announcement as “chaotic” and questioned whether some people would wrongly lose coverage as a result of the sweeping crackdown.
“Throwing three quarters of a million people into this bucket of ‘Your coverage is canceled’ and then having to figure it out later is a big concern,” said Levitis, who is now a senior fellow at the Urban Institute.
He said the administration could have adopted a more structured approach, such as taking lessons from states that run their own ACA insurance exchanges and have reported less fraud in their programs.
Some also called Vance’s announcement a distraction ahead of the midterm elections, comparing the administration’s fraud crackdown to its efforts to cut spending on Medicaid and other healthcare initiatives.
“Families need coverage they can afford and count on when they get sick,” Brad Woodhouse, president of Protect Our Care, a liberal-leaning advocacy group, said in a statement Tuesday. “Vance’s task force won’t accomplish that.”
Republicans contend that dwindling ACA enrollment is the result of necessary initiatives to cut waste and fraud after Democrats focused on growing the program but did too little to scrutinize who was signing up.
Some conservative lawmakers and policy experts had recently pushed for another crackdown, saying that fraudulent ACA enrollment had spiked after pandemic-era initiatives that made it easier to sign up for coverage — and created incentives for bad actors to take advantage of the program.
Brian Blase, the founder of the Paragon Health Institute, a conservative think tank that has driven attention on ACA enrollment fraud, welcomed the administration’s move.
The think tank estimated earlier this year that about 6 million ACA enrollees were fraudulent, a number that includes “phantom enrollees” either unaware they’d signed up or fabricated by brokers.
“The Trump administration actions to suspend brokers engaged in these activities and disenroll phantoms is welcome and will save taxpayers billions of dollars each year,” said Blase, who was an economic aide to Trump in his first administration.
Oz, who runs CMS, which oversees the ACA, has previously said that his agency believes perhaps one-third of ACA enrollment is improper.
“If you care about the ACA, then you’ll want us to take the fraud out,” Oz said at a White House news briefing in June.
At Tuesday’s event, Oz also singled out several convicted insurance executives who had wrongly enrolled tens of thousands of people into the ACA and used the profits to fund their lifestyles.
One fraudster has “a very punchable face,” Oz said, as Kim Brandt, a senior CMS official who is helping oversee the fraud crackdown, held up a photo.
Trump officials also have said that they have adjusted the government’s fraud-fighting tactics, shifting from a long-standing “pay and chase” approach — in which agencies would pay out claims before identifying fraud and then try to claw the money back — to a “stop and caught” model. That strategy has been powered by the use of AI analytics and pattern recognition to spot fraudsters, they added.
“We’ve learned something: Fraud doesn’t stand still,” Chris Klomp, a senior HHS official, said at Tuesday’s briefing.
Staff writer Sarah Gantz contributed to this article.
