U.S. Halts Obamacare Coverage for 750,000 Allegedly Fraudulent Enrollees

The Trump administration announced on Tuesday that it is terminating Obamacare coverage for approximately 750,000 individuals, citing allegations that they enrolled fraudulently or are "phantom" beneficiaries who either do not exist or were unaware of their health insurance coverage, as reported by NBC News.

Vice President JD Vance and Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services (CMS), revealed this decision during a press conference, linking it to a broader initiative to combat fraud within federal health programs.

Vance emphasized that these cuts are expected to save taxpayers $2.2 billion and was transparent about the rationale behind the decision:

“These programs are vital, they have merit, but they will not continue unless we stop the fraud,” Vance stated.

Oz elaborated that the individuals removed from coverage met certain suspicious criteria, including:

• Enrolled with the assistance of a broker.
• Never filed a medical claim.
• Had their premiums fully covered by federal tax credits.
• Lacked a verifiable Social Security Number or immigration documents according to CMS.

“We refer to them as ghosts because we believe the majority either don’t exist or had no idea they had coverage. We believe this because we’ve reached out through letters, telegrams, FedEx packages—every possible method to contact them. No responses,” Oz explained.

Debate Over Fraud Allegations

Oz drew a connection between the surge in enrollments during the pandemic and what he describes as a relaxation of oversight under the Biden administration.

“Obamacare had 10 million enrollees from 2015 to 2020. During COVID, it skyrocketed to 22 million. Oversight weakened, and the previous administration chose not to enforce it,” noted Oz.

In a March 2026 interview with NBC News, Oz contended that four to five million of the increased enrollments were fraudulently driven, particularly by brokers enrolling individuals without their knowledge to earn commissions.

Nevertheless, experts are questioning both the scale of the fraud and the methods being used to address it.

Cynthia Cox, director of the ACA program at KFF, a nonpartisan health research organization, cautioned, “It’s entirely possible many of these individuals were enrolled without their knowledge. It’s also entirely possible many were legitimately enrolled and simply failed to respond in time.”

The Congressional Budget Office had estimated in 2025 that 2.3 million people were improperly receiving enhanced tax credits, a figure significantly lower than the four to five million cited by Oz.

Moreover, the administration has not disclosed details regarding who lost their coverage or how they were informed.

Ongoing Investigations and Market Impacts

Vance stated that the administration is scrutinizing another 419,000 individuals who may have been improperly enrolled, although these individuals will have the chance to clarify their situations.

“There was something slightly different in their case compared to 100% fraudulent cases. We’re giving them another opportunity,” Oz clarified.

The announcement coincides with a significant shift in the insurance market.

During the Biden administration, ACA enrollment rose from 11 million to a record 24 million, driven by enhanced tax credits during the pandemic. However, this trend reversed when these subsidies expired on January 1, 2026, leading to millions of Americans losing their health insurance or facing skyrocketing premiums.

Analysts argue that the primary cause of this decline is not the elimination of fraud but the increased cost of premiums.

In mid-September, Trump also announced $500 rebates for nearly a million enrollees who purchased insurance without receiving subsidies, with distribution expected to begin in October across 30 states.