Federal health officials canceled 315,000 Affordable Care Act policies covering about 760,000 people after identifying unverified citizenship or immigration documentation and suspected improper enrollments, while also moving to restrict hundreds of brokers accused of questionable application activity.
By yourNEWS Media Newsroom.
The Centers for Medicare & Medicaid Services said Tuesday it canceled 315,000 Obamacare health plans covering approximately 760,000 people last month after reviews identified unverified citizenship or immigration documentation and suspected improper enrollments, as the agency simultaneously moved to tighten oversight of brokers participating in the Affordable Care Act marketplace.
The policy cancellations occurred Aug. 31 and involved 2026 plans in which people had been enrolled with assistance from agents or brokers without verified citizenship or immigration documentation and where insurers were unable to identify claims or establish contact with the consumers, according to CMS rule-making documents.
CMS disclosed the action as part of an interim final rule that took effect Tuesday. The rule allows the Department of Health and Human Services to temporarily halt registration by certain agents and brokers seeking to participate in federally facilitated ACA exchanges. The agency invoked provisions of the Administrative Procedure Act allowing it to bypass the normal advance notice-and-comment process, saying prior notice would be impracticable and contrary to the public interest. CMS is nevertheless accepting public comments on whether the rule should later be retained, changed or withdrawn.
The moratorium applies to agents and brokers who do not have Plan Year 2026 exchange agreements and are attempting to register to help consumers enroll through federally facilitated exchanges for 2027. Unless CMS ends, extends or modifies the restriction, those brokers will remain unable to complete registration until Feb. 1, 2027.
The agency is also pursuing enforcement against brokers whose enrollment activity it says raised compliance concerns. CMS said that during July and August it issued 569 notices of intent to terminate exchange agreements involving agents and brokers who “submitted statistically implausible rates of plan year 2026 applications” without required identifying information, including Social Security numbers.
Since January, CMS has terminated exchange agreements with hundreds of agents and brokers it classified as noncompliant. The agency said it continues investigating enrollment activity and working with state insurance regulators and insurers to identify additional cases involving potential violations of exchange standards.
CMS said the broader problem includes allegations that some agents and brokers enrolled consumers without valid consent, moved people into different health plans without authorization, supplied inaccurate application information or submitted questionable applications to obtain commissions.
Those practices can produce consequences beyond an unwanted insurance enrollment. According to CMS, unauthorized activity can result in improper advance payments of federal premium tax credits while exposing consumers to unexpected changes in coverage, denied claims, medical expenses and tax complications.
Federal officials said the financial exposure could be substantial. CMS calculated that unauthorized enrollment could account for as much as $6.6 billion in improper federal spending for the 2026 plan year under the high end of one methodology used by the agency. CMS cautioned in the rule-making document that the estimate could be too high because differences between subsidized exchange coverage and unsubsidized off-exchange plans may partly explain the underlying data used in the calculation.
The estimate was based in part on differences in medical-claim activity. CMS found that federally facilitated on-exchange plans were more likely than unsubsidized off-exchange plans to record no claims during the comparison period. The agency said that pattern could indicate unauthorized enrollment because a person who did not know he or she had been enrolled would not be expected to use the coverage, while also acknowledging that people may legitimately have health insurance without filing claims.
CMS said unauthorized plan changes can also leave consumers without access to doctors, specialists or prescription drugs covered under their previous insurance. People unknowingly enrolled in subsidized coverage may not discover the problem until receiving Marketplace tax documents or encountering difficulties when filing a federal tax return.
The enforcement effort targets enrollment in health plans established under the Affordable Care Act, the health law signed by then-President Barack Obama. Marketplace plans can provide federal subsidies based on a consumer’s income. President Donald Trump unsuccessfully sought repeal of the law during his first term and has since proposed health policy changes that could result in less comprehensive coverage in some circumstances.
CMS said the registration freeze is intended to remain in place while additional safeguards are implemented for the 2027 plan year. Planned changes include renewed identity verification for agents and brokers and requirements that broker-assisted applications contain Social Security numbers or immigration document numbers that CMS can verify for applicants other than newborns.
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