Park calls HHS fraud analyses 'at best misleading'

760,000 removed from ACA marketplace on fraud allegations, another 420,000 under investigation

Edwin Park, a research professor at the Center for Children and Families at Georgetown University’s McCourt School of Public Policy, said federal allegations arguing that a large share of current ACA marketplace plan enrollees are fraudulently or inappropriately enrolled are “at best misleading.” He singled out reports from the Paragon Institute and the U.S. Department of Health and Human Services, which he called “flawed” for directly comparing administrative data with unadjusted census data, even though the two measures calculate household income and size differently. The census counts all individuals living in the household, while Medicaid and the ACA marketplace exclude non-dependent relatives. “That has a big effect on the number of people who appear to be in certain income ranges,” Park said. “That has been used to say a huge percent of people don’t look like they have incomes in the right eligibility range.”

At Tuesday’s press conference, federal officials said the Trump administration is removing 760,000 people from ACA marketplace plans on fraud allegations, adding to previous efforts to reduce enrollment in federally subsidized insurance programs and likely causing some of the lowest-income Americans to forego healthcare, experts said. Officials also said they are investigating about 420,000 additional people they suspect of fraud and are imposing a six-month enrollment moratorium on new agents and brokers selling Obamacare policies.

Officials said they used AI tools to compile a list of more than 1 million people suspected of being fraudulently enrolled in the ACA marketplace, also known as Obamacare. The flagged enrollees shared three characteristics: they had been enrolled by a broker or agent, all of their ACA premium had been paid by the federal tax credit, and they had not supplied Social Security numbers or immigration documents. Insurers were asked to attempt contact with those enrollees; they were permitted to filter out people who had a previous claim or had previously communicated with the insurer. The enrollees had 30 days to respond, or their coverage was canceled.

Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, said the removed enrollees were a mixture of “phantoms” and “ghosts” as well as people who did not meet ACA eligibility requirements. “These are not real people,” Oz said, projecting $2.2 billion in federal savings from the removals. JD Vance, who is leading a federal task force on fraud, said: “We’re actually making sure that the people receiving Obamacare subsidies are actually entitled to receive them.” Vance spoke separately of two fraudulent brokers who had been convicted of quietly enrolling people to collect commissions from insurance companies, acknowledging that “some of those people were probably legitimate.” He did not speak of the steps necessary to reinstate them or to prevent future disenrollments.

No breakdown was provided at the announcement of how many of the removed enrollees were fictitious, how many had been enrolled by fraudulent brokers without their knowledge, and how many had been dropped because of income rules. “There’s no transparency about who these people are and why they’re being disenrolled, but I think it’s a reasonable concern that some number are being disenrolled inappropriately,” Park said. “A common theme here is to make it incredibly burdensome for individuals to enroll and stay enrolled in their health coverage.” Park said enrollees can appeal and be reinstated once they prove their identities, but that this will likely function as an additional hurdle making it harder for people to stay enrolled. Park added: “We know that when you add a lot of red tape, increase the amount of complexity and the requirements for paperwork,” that “leads to eligible people being disenrolled.”

Cynthia Cox, senior vice-president and director of the Program on the ACA at KFF, an independent health policy organization, said “there is no way to know how many legitimately enrolled people had their plans canceled.” Cox added that “it is entirely possible that many of these people were enrolled without their knowledge or were so-called phantom enrollees,” and “it is also entirely possible that many of these people were legitimately enrolled and simply did not respond in time.”

The fraud task force has also withheld $2.2 billion in Medicaid payments from California and Minnesota over alleged fraud — primarily in home health aide programs that disability advocates describe as a lifeline.

Park framed the removals within a broader pattern of administration actions: “A lot of these actions are intended to sharply undercut the success of and the long-term viability of the ACA’s coverage expansions, which have been an incredible success in terms of reducing the number of people without health insurance,” he said. He said the health-care cuts in the budget reconciliation law HR1 “in many ways were designed to undermine the Affordable Care Act coverage expansions” without explicitly repealing it — a longtime Trump promise, Park said. The Trump administration has also created new regulations to restrict marketplace enrollment, Park added. “You add it all together, and you’re going to have certainly significant reductions in enrollment — with those enrollment losses increasing over time.”

About 19.2 million Americans remain enrolled in the ACA marketplace, but nearly 3 million people lost their coverage between February 2025 and February 2026, according to the Center on Budget and Policy Priorities. Park said the broader enrollment decline followed the expiration of enhanced ACA tax credits at the end of 2025, which Republicans opposed extending. “Premiums skyrocketed, doubling or tripling for some enrollees,” Park said. “Alongside other financial pressures, like higher energy and food costs, there’s going to be an increasing number of people who can no longer afford their share of the premium.”

Some of the removed enrollees appear to have lost coverage because they fall into a gap created by a Supreme Court decision that made the ACA’s Medicaid expansion optional. In states that did not expand Medicaid, people earning between $16,000 and $22,000 a year often make too much to qualify for Medicaid but too little to qualify for ACA subsidies. “We’re going to make sure that they actually meet the income threshold requirements in order to receive these Obamacare benefits,” Vance said of this group. Oz called their removal “a little bit painful.”

Cracking down on unscrupulous brokers has been a bipartisan issue. The Biden administration finalized a rule to crack down on shady brokers and decertified about 200 of them; Trump administration officials later recertified those brokers last year.

Oz said Tuesday that about 35 percent of ACA enrollees have never used their health insurance. “That’s just not possible,” he said. “So we know there is fraud.” Park pushed back: “You can expect in any insurance risk pool that there’s going to be a lot of people who don’t use much healthcare or use healthcare at all.” Removing lower-risk enrollees could push premiums higher or cause insurers to leave markets, he said.

Park warned of wider ripple effects on the health system. “Providers, particularly safety net providers, operate under thinner operating margins,” he said. “If they’re facing payment cuts, they’re facing higher uncompensated care costs, as a result of more uninsured [patients], that may lead hospitals to cut services or staff, or close their doors entirely. And that makes it harder for everyone to access the care they need.”