CMS Cancels 315,000 Fraudulent Obamacare Enrollments Worth $2.2 Billion

The Centers for Medicare and Medicaid Services (CMS) has canceled approximately 315,000 Obamacare enrollments covering more than 760,000 people after determining the enrollments were unauthorized, according to a CMS fact sheet. The agency says the action, carried out with insurance companies, will recover roughly $2.2 billion in subsidies for taxpayers.

CMS also sent 569 notices of intent to terminate Exchange agreements to agents and brokers who submitted 2026 coverage applications without identifying information such as a Social Security number. Sixty-six of those brokers have already been terminated, with more terminations expected as CMS reviews responses.

In addition, CMS issued an interim final rule — effective immediately — imposing a six-month moratorium on new broker and agent registrations on the federal Exchange, intended to let the agency implement further anti-fraud measures. The moratorium does not apply to states running their own Exchanges. Some in the broker community have objected, noting that no new broker can register until next February, after the 2027 open enrollment period closes, effectively penalizing brokers who had no role in the fraud.

CMS defended the pause by pointing to data showing new agents enrolled for the 2026 plan year had markedly higher rates of problematic applications: a 2.8-times higher rate of unresolved income verification issues, a 2.7-times higher rate of missing Social Security numbers, a 2.6-times higher rate of unresolved citizenship or immigration status verification issues, and a 1.4-times higher rate of people dually enrolled in Exchange coverage and Medicaid. CMS argues this pattern suggests newer brokers may be disproportionately enrolling ineligible people to collect commissions.

A history of reversals

The timing of these enforcement actions raises questions. A Government Accountability Office (GAO) audit released last December found that in October 2024, CMS suspended 850 agents and brokers from the federal Marketplace over reasonable suspicion of fraudulent or abusive conduct tied to unauthorized enrollments or plan switches. But CMS officials told GAO that by May 2025, the agency had reinstated all of those suspended brokers in order to meet statutory and regulatory requirements.

It remains unclear why CMS reinstated those brokers last spring, or whether any of them are among those now receiving fresh termination notices.

The scale of the underlying problem has been substantial. CMS’s interim final rule states the agency received about 300,000 complaints in 2025 alleging unauthorized enrollments or unauthorized plan switching. A separate GAO report from July put the figure at 299,604 complaints for 2025, up from 258,424 in 2024. CMS says that trend has reversed so far in 2026.

Last year’s GAO report also found that 19 of 20 fictitious test enrollees were able to obtain subsidized coverage through the federal Exchange — a striking illustration of how porous the system’s safeguards had become.

CMS has not publicly explained why it reinstated the 850 suspended brokers in May 2025 only to move toward mass terminations months later. Given the persistence of fraud complaints throughout 2025, that reasoning deserves scrutiny — from the press, from CMS itself, and from Congress on behalf of the taxpayers funding these subsidies.