The Trump administration has announced the uncovering of what it describes as a massive fraud scheme within the Affordable Care Act (ACA) enrollment process, alleging that billions of taxpayer dollars were improperly disbursed. According to a Department of Health and Human Services (HHS) report, federal officials estimate that approximately $10 billion in taxpayer funds were improperly paid between 2021 and 2024 through fraudulent, phantom, and otherwise improper enrollments in ACA marketplace plans.
"Preserving the fiscal and programmatic integrity of the ACA Exchanges is key to safeguarding taxpayer-funded resources for those that truly need them." — Department of Health and Human Services Report
The findings, part of a broader Trump administration initiative to combat fraud, waste, and abuse across federal programs, point to weakened eligibility safeguards as a contributing factor. Federal investigators have already taken action, removing nearly three million questionable enrollments from the ACA exchanges. An additional 2.6 million enrollments remain under review as the investigation continues.
Enrollment in Affordable Care Act marketplace plans saw significant growth from approximately 10 million individuals at the beginning of then-President Joe Biden's administration to roughly 22 million by 2024. This expansion followed changes that broadened eligibility requirements and enrollment opportunities. The Trump administration's report suggests that millions of these new enrollments may have been improper or fraudulent. Improper, phantom, and fraudulent enrollments are estimated to have peaked at 5.6 million people in 2025, with more than one million current enrollments reportedly lacking a Social Security number.
Investigators have identified several distinct forms of alleged abuse. One common method involves applicants deliberately understating their income to qualify for larger taxpayer-funded subsidies, which are designed to make health insurance more affordable. Another identified issue is individuals receiving premium assistance despite not meeting the established eligibility requirements for the program.
The report also details the emergence of "phantom enrollments." In these cases, insurance brokers are alleged to have enrolled individuals in Affordable Care Act plans without their knowledge or consent, primarily to collect federal commissions paid for each enrollment. Officials attribute the ease with which these practices were carried out to reduced verification requirements that were in place.
Since taking office, the Trump administration states it has implemented a series of measures to address these vulnerabilities and restore program integrity. These actions include restoring stricter income verification requirements for ACA applicants, ending several special enrollment periods that were deemed susceptible to abuse, and increasing screening protocols to identify and prevent duplicate Medicaid enrollments. Furthermore, the administration has launched targeted investigations into insurance brokers suspected of creating phantom policies and has strengthened oversight of agents participating in the federal marketplace.
These efforts have resulted in the removal of nearly three million improper enrollments, while approximately 19.2 million people remain legitimately enrolled in Affordable Care Act plans. The administration has clarified that its objective is not to reduce legitimate health coverage for those who qualify, but rather to ensure that taxpayer dollars are exclusively directed toward individuals who are legally entitled to receive benefits under federal law.
The Department of Health and Human Services report emphasizes the importance of these actions, stating, "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 further highlights a specific concern regarding broker conduct, noting, "The federal government paying brokers to enroll individuals without their knowledge is not." The administration has affirmed its commitment to pursuing enforcement actions against brokers and any other parties accused of exploiting the program through fraudulent enrollment practices, vowing to continue its aggressive campaign against fraud, waste, abuse, and corruption through new regulations and investigations.
