Hospitals and clinicians are speaking out after the Centers for Medicare & Medicaid Services’ fraud crackdown.
Back in September, CMS canceled coverage for 315,000 Affordable Care Act Marketplace enrollments, effecting about 760,000 people. An additional 450,000 enrollments are at risk of being terminated.
The federal agency said it identified unauthorized enrollments after finding missing applicant information. In some cases, insurers could not contact consumers or verify their eligibility.
These plans are currently undergoing further eligibility checks regarding legal U.S. residency and income thresholds. The scale of the plan terminations still remains unclear as the CMS has not released a state-by-state or demographic breakdown of the cancellations.
In addition to the cancellations, the CMS barred 569 insurance brokers from submitting 2026 applications, placing a six-month emergency freeze on new agent and broker registrations. Patient advocacy groups argue that the government deliberately rolled back coverage, kicking eligible people off their insurance with few safety net resources.
The Impact Of The Cancellations
The CMS is expected to recover about $2.2 billion in advance premium tax credits associated with the canceled enrollments.
The Trump administration says the terminations aim to curb suspected enrollment fraud and improper federal subsidy payments. However, KFF reports that some people could have been inadvertently affected by the cancellations.
“That process likely resulted in some legitimately enrolled consumers losing their coverage,” explained Cynthia Cox, the senior vice president and director at KFF.
CMS Is Tightening Fraud Checks On Enrollment
The changes extend beyond just terminated plans and barred brokers. CMS also tightened ACA enrollment checks, enforcing stricter identity-verification requirements and new safeguards for agents and brokers ahead of 2027.
New agents or brokers will not be able to register or help consumers enroll in marketplace coverage during November’s open enrollment. The agency says the measures aim to prevent unauthorized coverage and improper federal subsidy payments.
Enrollments from new patients will also face heightened scrutiny. The agency shared that missing information in submissions may be flagged as fraud, prompting more cancellations. Applications must include a verified social security number or immigration documentation for each non-newborn applicant.
Healthcare Providers Voice Concern On Impact
Safety-net hospitals and medical centers have expressed deep concern over an immediate surge in uncompensated care costs. However, CMS alleges that the terminations were largely “phantom enrollees” and unauthorized broker fraud.
The administration’s rationale draws from research that states millions of ACA enrollees generated no medical claims. Industry experts, however, have largely claimed that the absence of claims doesn’t establish that enrollees obtained coverage improperly.
Hospital groups warn that the abrupt coverage terminations will be felt most by vulnerable patients. Legitimate enrollees whose coverage was canceled could be left uninsured and face barriers to routine medical care. Without coverage, hospitals could face more uncompensated care.
CMS Shifted The Economics Of Healthcare
CMS has shifted the economics of health insurance. These changes adjust who pays for care, how reliably practices get reimbursed, and increases the administrative work providers must absorb. These changes directly impact patient care, clinical operations and financial survival of some practices.
Healthcare groups warn that government coverage and reimbursement changes will have far-reaching consequences in 2027. These include marketplace plan terminations, reduced tax credits and rural hospital funding cuts.
The nation is experiencing a structural shift in health insurance coverage as rising costs and changes in the workforce reshape how Americans access care.
The expiration of enhanced ACA premium tax credits has driven up insurance costs for many Americans. At the same time, more workers are moving into freelance and gig roles that typically do not offer employer-sponsored health insurance. Only half of small businesses with 25 or more employees offer health coverage, while large employers are also struggling with rising health plan costs. Roughly two-thirds of large companies plan to increase employee paycheck deductions, deductibles or out-of-pocket maximums to offset these expenses.
These changes could create additional financial pressure for healthcare practices. While practice location and patient demographics may provide some financial stability, providers serving uninsured and underinsured populations are likely to face greater challenges as patients struggle to afford coverage and care.
Uncompensated Care Expected To Rise
CMS’s coverage changes largely transfer financial risk from insurers to healthcare providers and patients. Advocacy groups have argued recent actions largely penalize low-income families.
Patients had 30 days to respond to cancellation notices. However, patient groups note that some could have missed the deadline due to commitments or struggled to navigate the requirements.
Practices may need to verify patients’ coverage now and again during 2027 enrollment to confirm eligibility and avoid payment issues. A key concerns amongst trade associations is that many patients still need care, regardless of if they’ve lost health coverage. This could result in treatment delays until urgent care is needed. Clinicians are being warned to expect a potential rise in complex patient cases, among those uninsured or underinsured.
Care costs for these communities will absorbed by hospitals and clinics, especially those serving lower-resourced communities.
In a letter to CMS, AHA notes that a separate incident involving unauthorized broker-driven plan changes, resulted in health plans receiving more than $45 millon in outstanding unpaid claims, affecting 2,500 patients.
Administrative Burden At The Forefront
CHA recommends hospitals and clinics verify patients’ coverage for patients in ACA plans to potentially avoid future claim disputes. With weeks before 2027 open enrollment, coverage verification will be increasingly important for practices.
Clinicians and healthcare organizations can prepare by helping patients verify their coverage status, explore replacement options and determine whether they qualify for a special enrollment period. Billing teams may need to contact insurers, determine which payer is responsible for services already delivered, and address claims tied to retroactive coverage terminations.
For now, cancellations are prompting questions about the marketplace’s longer-term stability. Removing healthy enrollees could leave insurers covering a population with greater healthcare needs, potentially putting upward pressure on insurer costs. Several insurance plans have already exited the ACA marketplace citing projected risk, as risk pools shift and costs increase.
