The Trump administration has quietly reinstated a small number of people whose ACA health plans were wrongly cancelled in a fraud crackdown that cut 760,000 people from the Affordable Care Act rolls late last month. Insurance industry sources told KFF Health News that the Centers for Medicare & Medicaid Services has restored coverage for enrollees who should never have lost it, and more reinstatements could follow in the coming weeks.
The administration announced the mass disenrollment as an anti-fraud sweep, claiming fraud and improper enrollments and touting billions of dollars in potential taxpayer savings. But not everyone who was kicked off was fraudulently enrolled, and the quiet reversals suggest that legitimate consumers were caught in the dragnet.
How the ACA health plans purge unfolded
The process began in June, when CMS flagged nearly 1.2 million HealthCare.gov enrollments that showed four warning signs: no Social Security or immigration number on the application, a broker involved in the sign-up, no monthly premium being paid, and no contact or claims with the insurer. Insurers were told to try to reach each person at least twice, by phone and letter, and anyone who did not respond within 30 days was dropped.
Vice President JD Vance said fraudulent brokers had been signing up “phantom people”, and rogue brokers enrolling people without their knowledge for commissions is a real and documented problem. The ACA health plans purge is the largest single disenrollment action the federal marketplace has seen. Administration officials have said the sweep could save taxpayers billions by removing improper subsidies, though they have not published a detailed accounting of how the savings figure was calculated. But critics say the method also swept up real people who simply missed a letter or a phone call. “It may be true that some of those enrollments were not authorized, but it can be equally true that people got lost in the shuffle,” said Katie Keith of Georgetown Law.
Restoring wrongly cancelled ACA health plans
David Merritt, senior vice president of external affairs at the Blue Cross Blue Shield Association, confirmed that some of that group’s members are among those who have been reinstated. He also said CMS has an expedited review process for people who discover they have been improperly disenrolled, which matters because many victims may only learn they are uninsured when they try to use their coverage. Advocates for ACA health plans say the reinstatement process remains opaque, with no public tally of how many wrongful cancellations have been reversed. They argue CMS should proactively re-enroll anyone flagged by the same faulty criteria rather than waiting for patients to discover the loss of coverage.
Still, the administration has provided few details about the cancellations: how robust the outreach to targeted enrollees was, how long reinstatement takes, and how many cancellations have been reversed. The questions continue to swirl even as a second phase of the anti-fraud effort gets underway. An additional 419,000 sign-ups are now being scrutinized, and insurers must tell CMS how many of those enrollees do not respond to outreach by around mid-to-late November, after the midterm elections.
What comes next for ACA health plans
Supporters of the sweep, including Brian Blase of the Paragon Health Institute, whose research has supplied many of the findings cited by those alleging widespread enrollment fraud, say the crackdown was long overdue. Other policy experts counter that the dragnet may have punished people who failed to open a letter or answer an unknown number rather than fraudsters. The dispute over the ACA health plans purge is likely to intensify as the midterms approach, with Democrats already citing the cancellations as evidence of administrative overreach.
For now, anyone who suspects their ACA health plans were cancelled in error faces an expedited review at CMS, but the burden is on the enrollee to discover the problem. Consumer advocates say people who believe their ACA health plans were cancelled in error should check their marketplace account and contact their insurer before seeking care. Under the expedited review, CMS can restore coverage retroactively in some cases, though advocates warn the process can take weeks. With the second phase of scrutiny already underway, insurers and consumer advocates will be watching whether the reinstatements remain a small trickle or grow into an admission that the original purge cut far too deep.