The Trump administration is turning up the heat on Obamacare enrollment fraud. On Thursday, Fox Business reported that the Centers for Medicare & Medicaid Services (CMS) is sending notices of intent to 100 agents affiliated with the Affordable Care Act marketplace. These agents allegedly violated the exchange's standards of conduct by repeatedly submitting insurance applications without recipients' Social Security numbers or other identifying information.
CMS, led by Administrator Dr. Mehmet Oz, isn't messing around. The agency estimates that "roughly 35% of Marketplace enrollments may be illegitimate." If that number holds, it means about 5 million to 6 million people "whose premiums could be improperly subsidized," CMS said in a statement to Fox News Digital.
Marketplace agents are the licensed pros who help folks sign up for health insurance through the Affordable Care Act, aka Obamacare. So when they're the ones cutting corners, it's a big deal.
HHS report fuels enforcement effort
This latest move follows a Department of Health and Human Services report that found "2.6 million improper or phantom enrollments remain, including more than 1 million enrollments submitted without a Social Security number." In response, CMS has pushed several ACA reforms aimed at cutting fraud, waste, and abuse. The agency claims these proposed reforms would have saved about $3 billion, and it's blaming Democrats in Congress for blocking their full implementation.
CMS didn't immediately respond to a request for comment.
Part of broader healthcare fraud push
This isn't happening in a vacuum. The enforcement effort is part of the Trump administration's wider campaign against fraud across federal healthcare programs. Back in April, Oz directed all 50 states to submit Medicaid provider revalidation plans within 30 days or face intensified federal audits. His message was blunt: "We're asking the states to own that problem red and blue, all of them. If you don't take it seriously, it indicates to us that we might have to take the audits more aggressively."
The administration has also leaned on Vice President JD Vance's anti-fraud task force. In May, Vance announced a six-month pause on certain Medicare enrollments and a $1.3 billion Medicaid funding deferral tied to California, while warning states that ignoring Medicaid fraud could lead to more funding consequences.
The task force keeps widening its net. In February, it slapped a nationwide moratorium on suppliers of durable medical equipment, prosthetics, orthotics, and supplies. Earlier this month, it flagged a massive spike in Medicare claims for skin substitutes, from about $200 million in 2019 to $14.4 billion in 2025, a roughly 7,100% jump. That prompted CMS to identify potentially fraudulent claims and deny 96% of claims submitted since March. The agency also spotted about 4,200 suspicious claims for skin substitutes (allografts) totaling $224 million in charges through May.
The crackdown extends to criminal enforcement, too. In May, a federal jury convicted HealthSplash founder and CEO Brett Blackman in what the Department of Justice called a more than $1 billion Medicare fraud scheme involving fraudulent telemedicine prescriptions and medically unnecessary equipment. Prosecutors alleged the conspiracy generated over $1 billion in false Medicare claims and more than $450 million in payments from federal healthcare programs.
Disclaimer: This content was produced with the help of AI tools and was reviewed and published by MarketDash editors.
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