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Health Affairs This Week places listeners at the center of health policy’s proverbial water cooler. Join host Jeff Byers, editors from Health Affairs Publishing, and guests as they discuss health policy’s most pressing news and trends.
Hello, and welcome to Health Affairs This Week. I'm your host, Jeff Byers. We are recording on 10/01/2026. It's spooky season. We're back.
Jeff Byers:We have an insider event ready for you this month, October 21. Richard Kronick and Matthew Fiedler will discuss Medicare Advantage and explore themes and risk adjustment of coding and the like. Please join us. Check out the show notes for that. Today to discuss the ACA markets and the 750,000 individuals that could be removed from the marketplace, we have Meg Winchester, Health Affairs Publishing's very own.
Jeff Byers:Meg, welcome back to the program.
Meg Winchester:Thanks for having me.
Jeff Byers:Last week, the Trump administration announced it will or could remove, hopefully, you can set the record straight on that, around 750,000 enrollees from the ACA marketplace. That's a large, large amount of people, Meg. But can you give us some quick context in the marketplace? How many are in the marketplace? You know, what's the percentage of the marketplace is affected by this move, etcetera, etcetera.
Meg Winchester:Sure. According to KFF, there are about nineteen point two million people enrolled in health insurance across all ACA marketplaces, and 13,600,000 of those are enrolled through federalhealthcare.gov website. So the non state based marketplaces in 29 states. So that's a lot fewer than the 181,000,000 people in employer based insurance or a 140,000,000 covered by Medicare and Medicaid. But those affected by the recent disenrollment are about 4% of that population of the 13,600,000 in nonstate based ACA plans.
Meg Winchester:So they did terminate 315,000 enrollments that covered 760,000 people. I wanna quickly say that we published two pieces on forefront this week on the disenrollment and its potential implications by Katie Keith and Layton Koo. So I'm drawing on some of their analysis and other news coverage, but I would direct interested listeners to check those out.
Jeff Byers:Yeah. And that's a two separate pieces. So Katie Keith currently has a piece up that I know is titled administration cancels coverage for more than 760,000, comma, blocks new agents and brokers. So we'll put links to both of those in the show notes, but that is the title Katie Keyspie. So the administration stated these individuals were removed because of concerns around fraud.
Jeff Byers:Is is that correct?
Meg Winchester:Yeah. That's right. So in the announcement last week, vice president Vance and CMS administrator doctor Oz said that a lot of people were receiving premium subsidies that they didn't qualify for or that some of the people enrolled were not real or so called phantom enrollees. The process for the way that they determine this is pretty opaque, and there's not a lot of information on the CMS website. And according to Katie Keith, this is the first time CMS has initiated this type of mass disenrollment.
Meg Winchester:But what they did was in January, there was a report from the HHS office of the assistant secretary for planning and evaluation that identified one point two million people who are potentially incorrectly enrolled. And so some of these didn't have a Social Security number in their application, and CMS took that 1,200,000 people. And according to New York Times coverage, they identified within that where people had projected income that meant they were qualified for advanced premium tax credits that covered their full plan. So they were on $0 premium plans, ones where the person did not filed any claims for medical care since being on the plan, or three, there was no record of the person contacting the insurer. So then the insurers were required to notify these customers they identified and provide a thirty day window for them to respond.
Meg Winchester:If the person didn't reply, the insurer reported this to CMS that said the enrollment was improper and canceled the consumer's coverage. And this was retroactive to the date of enrollment, which allowed CMS to recoup all of the advanced premium tax credits that were paid to insurers on behalf of these enrollees. These, what was it, 315,000 plans. And so they say those cuts saved $2,200,000,000.
Jeff Byers:Okay. Okay. And so I know, fraud, waste, and abuse has been a big, tent pole issue for the Trump administration. So so this effort seems to feed into those, you know, larger efforts. But what else has the administration done to combat fraud, and what are their reasonings and findings?
Meg Winchester:Yeah. So in March, there was an executive order that set up a task force specifically dealing with fraud, waste, and abuse and a lot of that in the healthcare space.
Jeff Byers:So
Meg Winchester:on the CMS website, they highlight targeting Medicare overpayments, that they re recoup after post payment review and medical review for traditional Medicare. They're initiating risk adjustment validation in MA contracts. It seems like they're relying heavily on AI for automating some of these processes. And there was a report earlier this year from the office of the inspector general in HHS saying that these efforts have saved $5,500,000,000 already in six months in their review of federal programs, and they say they're, quote, holding bad actors accountable. And they highlight a couple of cases in that report.
Meg Winchester:One is a software company CEO that was running a billion dollar telemedicine and durable medical equipment scheme that was fraudulently billing the government. He was sentenced to prison and ordered to pay over $450,000,000 in restitution. And there was another case of an insurance broker and marketing executive who is enrolling vulnerable people in ACA plans without their consent. And so a whole bunch of people were sentenced to prison time and paid restitution in that case as well. There's also been a focus on Medicaid over the summer.
Meg Winchester:We saw over $1,000,000,000 being withheld Medicaid funds from California and Minnesota. Some of these have been called out for being targeted and politically motivated. Related to the disenrollment, CMS is tackling the role of brokers in the insurance marketplace, and so they just published an interim final rule that pauses new agent and broker registration in ACA plans. And they're saying, like that example I just said, they're enrolling people without their consent or fraudulently, and new agents and brokers were about three times more likely to engage in these activities than others that were more established. So for right now, that's on hold, but the final rule is still being discussed.
Jeff Byers:Thanks for that, Meg. So in health care, we hear a lot about trade offs. You know, you just gave a couple high profile examples of, like, where you would see this murky action that's like, you can pinpoint, hey. This is, you know, this is a bad actor. This is happening, etcetera, etcetera.
Jeff Byers:You know, fraud, waste, and abuse, like, that's definitely happening in the health care system. It's not nefarious to tackle that, but I have to imagine that there are probably some trade offs with something like this marketplace removal. Do you have any information on what those trade offs might be? Or the implications of the decision and etcetera?
Meg Winchester:Yeah. There are proponents of the cuts, people like Brian Blaze from Paragon Health Institute who says, you know, this is about cutting fraud, eliminating payments to insurers, and just overall saving tax dollars. And he says that if people lose insurance incorrectly and they are legitimately enrolled, they can just call CMS with their social security number, and be reinstated. But there are a lot of fears that people might be disproportionately affected. So some of the the effects for the ACA marketplace overall is having a smaller and less balanced risk pool that can lead to higher premiums, higher average morbidity and costs for people not disenrolled.
Meg Winchester:There's a possibility of cancellations for people who need coverage and don't know how to get back on. Leighton Kuh notes in his piece on forefront that federal regulations have long required that applications without Social Security numbers should be flagged and need to be resolved within ninety days or there's disenrollment. So it's unclear kind of how those got through. People also say the absence of medical claims doesn't imply that individuals aren't real or otherwise entitled to marketplace coverage. There have been studies showing up to a quarter of people with low incomes and insurance who don't use care in a given year, usually from minority groups.
Meg Winchester:We don't know yet who is disenrolled, but there are certainly people at higher risk of losing coverage. Katie Keith talks about how meaningful action against these agents and brokers is definitely overdue, and it's something the Biden administration was working on in 2024. And error and fraud are kind of inevitable in big complex financial systems. But as Layton Koo says, it's really important to distinguish fraud from error, that we don't know if there's malicious intent in all of these cases.
Jeff Byers:Yeah. So you bring up the risk pools, and it makes me wonder, like, how healthy are the ACA marketplaces in general? Like, how are insurers responding? Like, I'm looking at, a piece of information that says Cigna has opted to take out marketplace coverage in any state in 2027. So, I mean, the healthiness of the ACA marketplace has always been a topic of conversation since the ACA has been signed into law.
Jeff Byers:So what can you tell us on that?
Meg Winchester:Sure. I haven't seen a lot of industry response directly to these disenrollments yet. A couple of big industry groups said they welcome these efforts to reduce fraud in the marketplace, like Blue Cross Blue Shield Association, and America's health insurance plans have come out with that. But for the ACA overall, there was a big drop in enrollment last year that about 3,000,000 people dropped out between 2025 and 2026 after the expiration of pandemic era enhanced subsidies. 49 of the 50 states saw this drop, but it was less for states that have their own marketplace.
Meg Winchester:There are a lot of people predicting that the trend in increasing uninsured rates is gonna continue, partly because of the HR one cuts that are coming into effect this week. And based on early filings from insurers, it looks like a second consecutive year of double digit premium increases, which again could be even higher due to these recent disenrollments. So the marketplace is pretty shaky.
Jeff Byers:Yeah. And, just health care continues to get more expensive regardless of the market. We'll we'll see how the trends go, when it comes to enrollment. What can we expect next in general when it comes to, whether it be fraud or ACA marketplace?
Meg Winchester:Oh, so many things. And like I said, there are predictions of increasing uninsured rates, and so the safety net is gonna have to deal with that in some way. Regarding disenrollment in particular, officials said they plan to investigate another 440,000 ACA enrollees who might be enrolled fraudulently as well on top of these other ones. Those are undergoing verification right now. There's also signals from the administration reported by Politico that there will be aggressive state crackdowns and a focus on autism care services, which they say is an area where providers are overcharging the government, and it's more fraud prone than other areas.
Meg Winchester:We also have a recent Forefront article on that by Cody Kinsley and Daniel Reciniak. And I think we're gonna see a lot more discussion of these issues around fraud, waste, and abuse heading into next month's midterm elections. It's a hot topic.
Jeff Byers:That it is. Well, Meg Winchester, thanks again for joining us today on Health Affairs This Week. If you, the listener, enjoyed this episode, please send it to the dirty, dirty liar in your life, and we will see you next week. Thanks all.