Trump Admin’s Fraud Crackdown Helped Drive Down Obamacare Enrollment

The sharp decline in Affordable Care Act enrollment this year is not simply the result of higher premiums or expiring subsidies, but the fruit of a years-long effort to root out rampant fraudulent enrollment in the coverage program.

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A recent report from the assistant secretary for planning and evaluation (ASPE) in the Department of Health and Human Services found that effectuated ACA enrollment stood at roughly 19.2 million people in February 2026, down from 22.1 million a year earlier, which is the largest drop since ACA marketplaces were established in 2014. Integrity efforts from the Trump administration “stopped about 1.5 million enrollees from receiving subsidies they did not qualify for and ended or blocked another 1.4 million through February 2026, for a total of 2.9 million people who had previously been improperly receiving subsidies they did not qualify for,” the report reads.

The Centers for Medicare & Medicaid Services canceled coverage for 250,000 people enrolled in an ACA plan on the grounds that the insured had acquired coverage fraudulently.

The HHS report categorizes the two most common types of fraudulent enrollees as “improper” or “phantom”. Improper enrollment is done by individuals misstating their income to gain access to free plans. Phantom enrollees are those unknowingly enrolled in free plans by brokers. The report estimates that improper and phantom enrollment in ACA coverage peaked at 5.6 million people in 2025. 

“Brokers would get commissions for every month that an individual was enrolled, regardless of whether they knew they were enrolled in the program. And insurers, of course, like this because they like when the government is paying one-hundred percent of the cost,” said Brian Blase, CEO of Paragon Health Institute, a healthcare-policy think tank in Washington. “So you have incentives for enrollees, brokers and insurers to misstate income, qualify for more subsidies, increase enrollment, and therefore increase commissions.” 

The work to root out ACA fraud was spearheaded by an anti-fraud task force, established in March via executive order and led by Vice President JD Vance and Federal Trade Chairman Andrew Ferguson. The task force spans multiple government agencies and is responsible for implementing new fraud detection and reporting protocols, investigating Biden-era policies regarding fraud prevention, proposing new legislative and regulatory tools to combat fraud, and prosecuting illegal behavior when necessary to recover as much in improperly obtained funds as possible.

The task force released figures Wednesday, first reported by Fox News, showing a massive 7,100 percent surge in Medicare claims for tissue and organ transplants over the past six years. After discovering the spike, the anti-fraud task force has rejected 96 percent of claims since March.

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The second Trump administration inherited a bloated ACA program. Enrollment grew rapidly from 2021 to 2024, spurred on by enhanced subsidies in the American Rescue Plan Act that cheapened enrollment premiums and made them free for enrollees within 100 to 150 percent of the federal poverty level. The Biden administration also rolled back eligibility and income-verification measures and enrollment-period limits that made fraudulent enrollment possible and profitable. 

The enhanced premium tax credits enacted during the pandemic expired at the beginning of the year after congressional Democrats had triggered a 43-day government shutdown to prevent their expiration. Some analysts have alleged that the resulting rise in coverage costs is the primary reason for the drop in enrollment, not fraud elimination efforts. 

But premium subsidies remain generous. According to analysis of the ASPE report by Paragon, the median exchange enrollee pays just $42 per month in premium expenses, with taxpayer funds still covering about 94 percent of the cost. 

Additionally, more than 80 percent of cancellations over the last year came from enrollees who were assisted by a broker or an agent, which would suggest that crackdowns on the main avenue for fraudulent enrollment are effective.

Institutional oversight will remain a hurdle for combatting fraudulent enrollment. The report estimates that 2.6 million improper and phantom enrollments remain, with one million enrollees lacking a social security number.

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