US Cancels 315,000 Obamacare Health Plans Covering 760,000 People Over Citizenship Concerns
- The US Centers for Medicare & Medicaid Services cancelled hundreds of thousands of Obamacare plans last month over unverified citizenship documents
- CMS also moved to bar 569 brokers it accused of submitting suspicious applications and enrolling people without their knowledge or consent
- The agency warned that unauthorised enrollments through these plans could cost the federal government up to $6.6 billion in 2026
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The US Centers for Medicare & Medicaid Services (CMS) cancelled 315,000 Obamacare health plans covering roughly 760,000 people in June 2026, citing unverified citizenship or immigration records and suspected improper enrollments.
The decision was disclosed in rule-making documents published in the US Federal Register on Tuesday. CMS said the affected plans were terminated after it could not confirm the eligibility of enrollees, raising concerns about illegal use of the subsidy programme.
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Brokers accused of fraud
Alongside the cancellations, CMS announced it would ban 569 brokers from the marketplace, saying they had submitted "statistically implausible rates of plan year 2026 applications" that lacked basic applicant details such as social security numbers.
The agency said some of those brokers allegedly signed people up for coverage without their knowledge, switched existing customers to different plans without permission, used false information to complete applications, and created questionable submissions purely to earn commissions. CMS warned that this kind of activity can trigger improper federal premium-tax-credit payments and can leave consumers facing unexpected coverage changes, unpaid medical bills, or tax complications.
To address the problem quickly, the administration chose an emergency rule-making process to impose an immediate, industry-wide freeze on new Obamacare broker registrations, skipping the standard advance notice-and-comment period that normally precedes such decisions. Brokers who do not hold a valid 2026 registration will remain subject to the freeze until February 1, 2027.
What it could cost the federal government
CMS estimated that unauthorised enrollments through the Affordable Care Act marketplace could result in up to $6.6 billion in improper federal spending for the 2026 plan year alone.
The Affordable Care Act, widely known as Obamacare, was created under Democratic President Barack Obama and offers income-based subsidies to help Americans purchase health insurance.
Republican President Donald Trump made repeated efforts during his first term to repeal the law and has since proposed reforms that critics say would reduce the quality of coverage available under the programme.
Source: Legit.ng
