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HHS cut 3M ACA Marketplace enrollments in ongoing fraud efforts

The agency said it rooted out fraudulent Affordable Care Act enrollments following the 2025 Trump rule that laid out stricter eligibility, enrollment and enforcement standards.

Sara Heath
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Published: 29 Jun 2026

A new HHS report contends the Trump Administration has rooted out nearly 3 million fraudulent Affordable Care Act Marketplace enrollments.

Still, the agency estimates there are 2.6 million "improper or phantom enrollments" remaining on the Marketplace.

The report, prepared by the HHS Assistant Secretary for Planning and Evaluation, argued that ACA Marketplaces have been rife with fraud since 2021 and the passage of the American Rescue Plan.

The law created Marketplace flexibility, particularly benefitting folks earning between 100-150% of the federal poverty level, including year-round enrollment and reduced verification requirements for those eligible for $0-premium plans. The flexibilities were later extended by the Inflation Reduction Act in 2024.

While some public health experts say the changes improved access to affordable health insurance coverage, ASPE said its data indicate that the enrollment increases were actually fraudulent. Because insurance brokers and agents earn commission for enrolling consumers, these policies might have incentivized them to enroll people into $0-primum plans, ASPE said.

The number of people enrolled in a $0-premium plan increased by 7.6 million after the ARP and IRA policies. This coincided with a rise in zero-claim enrollees, meaning people who did not generate any claims because they did not access any healthcare. ASPE acknowledged that it is normal for low-income folks to have lower utilization rates, but the figures from between 2024 and 2026 indicate an unusual pattern.

"This may signal an uptick in fraudulent or improper enrollment by agents and brokers leveraging the fact that the poorest enrollees are not required to pay a premium, and therefore receive no bill and can be enrolled without their knowledge," ASPE wrote in the report.

All said, ASPE estimated that 5.6 million ACA Marketplace enrollees in 2025 were fraudulent or phantom.

Enrollment declines the result of HHS fraud efforts, ASPE says

The Trump Administration's Marketplace Integrity and Affordability Rule helped root that out, ASPE argued.

Implemented in 2025, the rule set out to "ensure those receiving subsidies were actually eligible for those subsidies." The rule laid out stricter eligibility, enrollment and enforcement standards.

This resulted in 1.5 million fewer enrollees receiving subsidies ASPE said they did not qualify for, and another 1.4 million enrollees' coverage being ended or blocked through February 2026. That's a total of 2.9 million fewer fraudulent or phantom enrollees on the ACA Marketplaces.

There is still fraud on the Marketplaces, the report noted, estimating that around 2.6 million improper or phantom enrollments remain. This includes more than 1 million enrollments without a social security number, ASPE said.

These figures come as public health officials observe a decline in overall ACA Marketplace enrollment, driven by the end of enhanced premium tax credits and affordability issues. Indeed, as of January 2026, Marketplace enrollment had declined from 23.6 million signups to 22.8 million, per CMS.

This ASPE report indicates that the enrollment decline is a signal of more fraud enforcement. However, some groups suggest that real people are getting caught in the crosshairs.

"While the Trump administration attributes this drop in enrollment to their attempts to address fraud, this coverage loss happened at the same time millions of people faced steep increases in their premium payments -- often in the double or even triple digits -- with the expiration of enhanced tax credits," Cynthia Cox, senior vice president and director of the Program on the ACA at KFF, said in a blog post.

Sara Heath is an executive editor at Xtelligent Healthcare Media, where she covers patient engagement, healthcare policy and health IT.

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