Vice President JD Vance has announced a major crackdown on rampant ‘fraud’ found in the Obamacare healthcare system.
The Trump administration plans to remove about 760,000 people from Affordable Care Act coverage and subject hundreds of thousands more to additional eligibility checks, and has already begun doing so.
The move comes as Vance’s White House Task Force to Eliminate Fraud expands its campaign against what the administration describes as abuse of taxpayer-funded programs.
Speaking Tuesday, Vance said officials had uncovered what he described as a major fraud operation 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 continued.
The administration estimates the latest action will prevent approximately $2.2 billion in federal subsidy payments.
Vance was joined by Health and Human Services Secretary Dr Mehmet Oz, who said the investigation uncovered questionable enrollments involving people officials could not verify or in some cases, could not reach.
‘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 freeze on new Obamacare broker and agent registrations while the administration investigates suspicious enrollment activity
Obamacare was signed into law in 2010 to expand access to affordable health coverage. Today, about 23.1 million Americans have ACA Marketplace coverage
‘Fraud will destroy Obamacare,’ Oz said, arguing that insurers cannot operate effectively without knowing who is actually receiving coverage.
Oz also announced a six-month freeze on new Obamacare broker and agent registrations while the administration investigates suspicious enrollment activity.
The Centers for Medicare & Medicaid Services said it canceled approximately 315,000 ACA policies in August, affecting about 760,000 individuals.
The agency cited unverified citizenship or immigration status and suspected fraudulent enrollments among the reasons for the cancellations.
And CMS is also targeting brokers accused of facilitating improper enrollments.
The agency issued 569 notices of intent to terminate Exchange agreements with agents and brokers whose application patterns officials described as ‘statistically implausible,’ including applications missing key identifying information such as Social Security numbers.
Another roughly 419,000 enrollees are being subjected to additional eligibility checks, including verification of income and legal status.
The administration estimates improper enrollment activity could cost the federal government as much as $6.6 billion during the 2026 plan year, with the latest cancellations expected to save approximately $2.2 billion.
The crackdown follows broader scrutiny of ACA enrollment practices.
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.
