Here’s a fuller straight-news rewrite that distinguishes the administration’s fraud allegations from CMS’s separately measured improper-payment data:
The Trump administration says millions of questionable enrollments in Affordable Care Act health plans resulted in billions of dollars in unnecessary federal subsidies, blaming weakened eligibility safeguards adopted during former President Joe Biden’s administration.
Officials at the Department of Health and Human Services have been examining the dramatic growth of enrollment in ACA insurance exchanges between 2021 and 2024, when the number of people selecting Marketplace plans more than doubled.
A Trump administration official told Fox News Digital that abuse of the system cost taxpayers an estimated $10 billion annually during that period, as people were improperly enrolled in heavily subsidized or free health plans. The administration attributes much of the problem to relaxed income verification, expanded enrollment opportunities and other changes made under Biden.
However, that $10 billion figure should be distinguished from the government’s formal improper-payment estimates. CMS has cautioned that an improper payment is not necessarily fraud; it can also result from administrative errors, missing documentation or failure to comply with program requirements.
For benefit year 2022, for example, CMS and the IRS estimated approximately $926 million in improper premium-tax-credit payments out of roughly $57 billion in total payments and claims.
The Trump administration nevertheless says broader enrollment data point to substantial problems that were not captured by those earlier measurements.
A June HHS analysis estimated that improper, “phantom” and fraudulent ACA enrollments peaked at approximately 5.6 million people in 2025.
The report defines improper or fraudulent enrollment to include people misstating income to qualify for subsidies, while “phantom” enrollment refers to people placed into plans without realizing it, including through unauthorized broker activity.
Enrollment in ACA exchange coverage rose sharply during the Biden years. About 10 million people were enrolled when Biden took office, while enrollment surpassed 21 million for the 2024 plan year.
“By our estimate, improper, phantom, and fraudulent enrollment peaked at 5.6 million people in 2025,” the report states.
“We estimate 2.6 million improper and phantom enrollments remain, including over 1 million enrollments without a Social Security number.”
Several factors contributed to that increase, including enhanced premium tax credits enacted by Congress that allowed many consumers to obtain plans with little or no monthly premium.
Critics of the system argued that zero-premium plans also created an opportunity for unscrupulous brokers to enroll people without their knowledge because there was no monthly bill that might immediately alert consumers.
CMS acknowledged a major increase in unauthorized enrollment complaints beginning in 2023 and 2024. The agency said applications containing information that did not match federal databases had also increased significantly, rising from 2.6 million in 2020 to 6.3 million by 2022.
The problem was not merely theoretical.
Federal prosecutors have brought major criminal cases involving brokers who fraudulently enrolled consumers in ACA plans to collect commissions.
In April, the Justice Department announced that AP of South Florida agreed to plead guilty in a scheme involving thousands of consumers who were improperly enrolled in fully subsidized ACA plans. Prosecutors said the scheme generated approximately $141.5 million in unwarranted federal subsidies.
The company’s former parent, AssuredPartners, separately agreed to pay $107 million to resolve civil allegations related to fraudulent ACA applications.
In another case, two executives were sentenced to 20 years in prison in February for operating an ACA enrollment scheme involving approximately $233 million in federal subsidies. Prosecutors said vulnerable consumers were signed up for plans without proper authorization while the defendants collected millions of dollars in commissions.
CMS has also begun removing subsidies where eligibility problems can be established administratively.
In January, the agency reported that it had ended premium subsidies for nearly 1.5 million people who were either ineligible for financial assistance or had been enrolled without authorization.
More than 550,000 people lost ACA subsidies after CMS identified them as simultaneously enrolled in Medicaid or the Children’s Health Insurance Program, while hundreds of thousands more lost assistance because they failed to file tax returns and reconcile previously received premium tax credits.
Another approximately 250,000 unauthorized policies were canceled.
CMS estimated that those actions alone produced nearly $10 billion in annualized savings. That figure represents projected savings from stopping future subsidies and is different from the administration’s separate claim about how much money was improperly spent during the Biden years.
The administration has also reinstated several safeguards that officials say were either suspended or weakened after 2021.
Those include twice-yearly checks for people simultaneously receiving Medicaid or CHIP coverage and subsidized Marketplace insurance, closer verification of income information and renewed enforcement of requirements that consumers file tax returns and reconcile advance premium tax credits.
CMS also finalized its Marketplace Integrity and Affordability Rule in 2025. Among other changes, the regulation tightened income verification, changed special-enrollment procedures and made it easier for the government to terminate brokers accused of violating Marketplace rules.
Some provisions have faced legal challenges, and critics of the administration’s broader ACA changes argue that aggressive verification requirements can also remove eligible people from coverage because of paperwork problems or outdated government data.
The administration maintains that the tighter controls are necessary to ensure federal premium subsidies go only to people who qualify.
The emerging picture is therefore broader than a single alleged $10 billion “fraud scheme.” Federal prosecutors have documented substantial criminal fraud involving ACA enrollment, while CMS has separately identified large numbers of unauthorized, duplicative and otherwise improper enrollments.
The administration is using those findings to argue that the rapid expansion of Marketplace enrollment under Biden occurred without sufficient safeguards — and that stronger verification is necessary to prevent billions of dollars in future taxpayer-funded subsidies from going to ineligible or nonexistent enrollees.
