Trump Admin Says It Uncovered $10 Billion Obamacare Fraud Scheme

The Trump administration says it has uncovered widespread abuse within the Affordable Care Act exchanges after years of weakened eligibility checks, questionable subsidies, and insurance policies allegedly created without the knowledge of the people enrolled.

A Department of Health and Human Services report estimates that improper, fraudulent, and so-called “phantom” Obamacare enrollments reached millions under former President Joe Biden. Administration officials also estimate that the resulting improper federal spending cost taxpayers roughly $10 billion annually between 2021 and 2024.

The administration says nearly three million questionable enrollments have already been removed, while another 2.6 million remain under review.

The findings are part of President Donald Trump’s broader effort to identify fraud, waste, and abuse throughout the federal government and restore basic accountability to programs funded by American taxpayers.

Enrollment Surged as Safeguards Disappeared

When Biden entered office, approximately 10 million people were enrolled through the Affordable Care Act exchanges. By 2024, that figure had climbed to roughly 22 million.

The rapid growth came after the Biden administration expanded access to fully subsidized plans, relaxed income-verification procedures, and increased opportunities for enrollment throughout the year.

CMS has said the number of applications containing information that did not match federal records rose from 2.6 million in 2020 to 6.3 million in 2022. The agency also reported a sharp increase in complaints from Americans who said they had been enrolled in Marketplace coverage without their knowledge or consent.

Federal officials now believe a significant share of the enrollment increase involved people who were ineligible, improperly subsidized, enrolled in multiple government programs, or signed up without authorization.

“By our estimate, improper, phantom, and fraudulent enrollment peaked at 5.6 million people in 2025,” the report states.

“We estimate 2.6 million improper and phantom enrollments remain, including over 1 million enrollments without a Social Security number.”

The report does not claim that every questionable enrollment involved deliberate criminal conduct. The total includes suspected fraud, improper eligibility determinations, duplicate coverage, unverifiable information, and unauthorized policies allegedly created by brokers.

That distinction does not make the potential waste any less serious. Every improper subsidy represents money taken from taxpayers and diverted away from Americans who legitimately qualify for assistance.

Brokers Accused of Creating ‘Phantom Enrollments’

One of the most troubling practices identified by investigators involves “phantom enrollments.”

Administration officials allege that some insurance agents and brokers enrolled Americans in Obamacare plans without their knowledge in order to receive commissions or other compensation tied to the policies.

The availability of plans requiring little or no monthly payment allegedly made the scheme easier to conceal. In some cases, victims reportedly did not realize they had been enrolled until they encountered tax problems, lost other coverage, or discovered that their existing insurance had been changed.

Other applicants allegedly understated their income to qualify for larger taxpayer-funded subsidies. Some people received premium assistance despite failing to meet eligibility requirements, while others were simultaneously enrolled in Medicaid or the Children’s Health Insurance Program and subsidized Marketplace coverage.

CMS reported in January that more than one million enrollees had their premium subsidies removed because they were concurrently enrolled in Medicaid or CHIP or had failed to file and reconcile previously received tax credits. The agency also canceled unwanted coverage for roughly 250,000 consumers who had been enrolled without authorization.

Trump Administration Restores Verification

Since returning to the White House, the Trump administration has moved to reinstate income-verification rules and other safeguards weakened or eliminated during the Biden years.

The administration has restored checks for duplicate Medicaid enrollment, restricted certain special enrollment periods, strengthened oversight of agents and brokers, and investigated complaints involving unauthorized policies.

CMS has also proposed requiring stronger verification when applicants’ income claims cannot be confirmed through federal tax records. The agency estimates that its broader program-integrity reforms could prevent between $11 billion and $14 billion in improper subsidy spending in 2027 if fully implemented.

Approximately 19.2 million people reportedly remain enrolled after the administration’s initial removals.

Officials insist the objective is not to strip coverage from Americans who legally qualify. Instead, the administration says it is trying to ensure that taxpayer-funded benefits go only to eligible recipients and that private brokers cannot exploit federal subsidies for personal profit.

“Preserving the fiscal and programmatic integrity of the ACA Exchanges is key to safeguarding taxpayer-funded resources for those that truly need them,” the report states.

“The federal government paying brokers to enroll individuals without their knowledge is not.”

The report says enforcement actions will continue as officials review the remaining questionable accounts and investigate agents accused of manipulating the federal Marketplace.

“The Trump Administration continues to aggressively root out fraud, waste, abuse, and corruption by promulgating new regulations to improve program integrity, investigating suspected improper or fraudulent enrollment, and taking action against agents and brokers committing fraud.”

Obamacare Faces Renewed Scrutiny

The findings are likely to intensify the long-running national debate over Obamacare and the federal government’s growing role in the healthcare system.

Supporters of the Biden-era enrollment policies argued that simplified verification and expanded subsidies made healthcare coverage easier to obtain. Conservatives warned that eliminating basic safeguards would invite fraud, increase federal spending, and allow insurance companies and dishonest brokers to profit at taxpayers’ expense.

The emerging evidence gives those warnings renewed weight.

A healthcare safety net cannot survive without eligibility standards. When Washington distributes billions of dollars without confirming identities, income, or enrollment consent, the system stops functioning as assistance for the needy and becomes an open invitation for exploitation.

President Trump and congressional Republicans have spent more than a decade promising to repeal, replace, or fundamentally reform Obamacare. The discovery of millions of suspected improper enrollments may provide fresh momentum for lawmakers to finally confront a program whose complexity and weak oversight have made accountability nearly impossible.

The remaining question is whether Republicans will use that momentum to deliver meaningful reform—or once again allow another bloated federal program to remain largely untouched.