Obamacare’s enrollment declines

RFK Jr., states at odds over cause of Obamacare’s enrollment declines

Trump administration officials point to their work on fraud as the reason for dropoffs while states and insurers blame higher premiums.

By Robert King and Kelly Hooper

Both the Trump administration and state officials agree on the numerical fact: People this year are dropping their Obamacare coverage — to the tune of 1.2 million people out of a total enrollment of 24.3 million as of March, according to the latest federal data.

But they are at odds over why.

Trump officials say better federal policing of fraud on Healthcare.gov accounts for much of the drop. Meanwhile, some state Affordable Care Act exchanges blame higher costs, particularly after Congress decided not to extend beyond Jan. 1 the enhanced subsidies that brought premiums down for higher-income people.

The dueling narratives are taking place ahead of the fall midterms as Democrats attempt to persuade voters that President Donald Trump and his policies are to blame for rising costs across the economy — with health care at the top of the list. Republicans are countering that they are saving Americans money by going after fraud that Democrats have long overlooked — and showing results.

The full extent of the coverage loss — as well as which Americans are opting to drop insurance — is expected to become clearer in the coming months.

As they start parsing the reasons, states and insurers examining signups say it appears that middle-income, working Americans and immigrants who are here legally are falling through the cracks as they confront much higher premium payments compared to last year.

Marketplace officials in the mostly-blue states who answered POLITICO’s request for interviews noted they’re hearing stories directly from individuals within these groups who’ve opted out of coverage because they say they can no longer afford it. They expect dropoffs to increase as the year wears on.

“You look at all of the data coming out across the country, and I think there is a very tangible sense that is emerging that the enhanced subsidies were designed to help working families who heretofore fell between the cracks,” said Karen Ignagni, executive board chair for the insurer EmblemHealth, a nonprofit ACA plan based in New York City.

The explanation of states’ and insurers’ contrasts starkly with that of Trump administration officials.

Health Secretary Robert F. Kennedy Jr. recently told Congress enrollment has declined because people who were fraudulently signed up for Obamacare are being kicked off the rolls.

“The only people who lost coverage were people who were never entitled to coverage,” said Kennedy during an April 21 hearing before the House Energy & Commerce Committee, referring to people who were illegally enrolled in two states or on the ACA and Medicaid at the same time.

The Centers for Medicare and Medicaid Services said in a statement that reasons for coverage declines go beyond fraud, including factors such as finding insurance from another source. But the agency leaned into fraud.

“Year-over-year enrollment changes can reflect a range of factors, including CMS’ actions to strengthen program integrity and protect consumers and taxpayers,” the agency said in a statement. “These efforts include addressing unauthorized or fraudulent enrollments, as well as identifying individuals who may have been enrolled in multiple forms of coverage simultaneously or without their knowledge.”

However, CMS has not yet produced evidence that the 2026 dropoffs are due to fraud.

At POLITICO’s Health Care Summit on April 21, CMS Administrator Mehmet Oz said states’ and insurers’ warnings that millions would lose coverage as a result of the subsidies expiring were overblown.

He also said that the administration has strived to determine who is legitimately enrolled in the ACA. The agency said it ultimately found that 1.6 million people were illegally dual-enrolled in Medicaid and the ACA in 2024, whether through their own doing or that of an unscrupulous broker.

However, the agency asserts that there are fewer automatic enrollments for 2026 coverage because of its aggressive policing, including cutting coverage for people on the exchange who were also signed up for Medicaid.

The agency did not specify how much automatic enrollments have dipped overall and for that reason. They have also not released demographic or income-level breakdowns of the 2026 ACA signups.

States’ perspective

POLITICO reached out to the 21 Obamacare exchanges managed by states and the District of Columbia. Eleven exchanges responded, and two of those (Maryland and New Mexico) did not experience any coverage losses. Both of those states partially offset the loss of the enhanced subsidies with their own funds.

The remaining nine exchanges in mostly blue states — California, Colorado, Connecticut, Kentucky, Massachusetts, New York, Rhode Island, Vermont and Washington state — said higher premium costs mostly fueled coverage losses beyond the normal churn often caused by people leaving for Medicaid or employer insurance plans.

“Fraud is not a driver of coverage loss,” according to Vermont’s Department of Health Access. “Based on the disenrolling population, the primary driver is affordability.”

In Vermont, 28,535 people signed up for marketplace coverage as of April 10, down about 12 percent compared to 2025 signups of 32,358. Nearly 2,000 people who earn more than 400 times the federal poverty level, or six percent of total enrollment, have dropped coverage for 2026.

Those individuals no longer qualify for federal assistance after the enhanced subsidies expired.

Colorado, which also used its own funds to offset the subsidy decline, saw its overall enrollment decline by 2 percent to 286,501. The greatest dropoffs were a 5 percent decline among signups of rural residents and a 6 percent decline among adults ages 55 or older.

“Many customers in these groups no longer qualify for financial assistance,” the state said in a statement.

In the leadup to the subsidies’ expiration, health policy experts forecasted that many early retirees — who enroll in ACA coverage because they don’t yet qualify for Medicare and no longer have coverage through an employer — might opt to forgo coverage as premiums skyrocketed.

“It is concerning that they are noting this age group, which is an age group that tends to have more health problems,” said Sara Collins, senior scholar with the think tank Commonwealth Fund.

Lawfully present immigrants, including people with green cards and visas, represented a large portion of those dropping coverage in Massachusetts, state officials said. The One Big Beautiful Bill Act passed by Congress last year restricts such immigrants who earn below 100 percent of the federal poverty level but do not qualify for Medicaid from getting subsidies.

Lawfully present immigrants have to wait five years before they enroll in Medicaid. But up until the enactment of the megalaw, they were able to receive subsidies to purchase exchange coverage.

“About 27,000 individuals in this population (about 72 percent) either proactively cancelled their 2026 plan or were terminated for failing to pay their newly unsubsidized premium,” the state said in a statement. “Among higher income individuals who lost subsidies, only about 15 percent cancelled their plan or were terminated for non-payment.”

The enhanced subsidies — first passed in 2021 and renewed in 2022 through last year by a Democratic-led Congress — ensured anyone earning up to four times the federal poverty level would not pay more than 8.5 percent of their annual income on health costs. The subsidies also greatly reduced premiums for people with lower incomes, ensuring some Americans paid nothing for their plan.

The population that qualified for the enhanced subsidies before they expired was a relatively small part of overall Obamacare enrollment but the exact number is unavailable. The vast majority of enrollees get some type of assistance, CMS said in a March 27 press release, including the original subsidies created under the ACA in 2010.

Coverage shifts

States and insurers said Obamacare enrollees that chose to keep their coverage are shifting into plans that are cheaper but might leave them vulnerable to costly medical bills.

Rhode Island saw its overall enrollment decline by 20 percent compared to the end of 2025, but bronze plan enrollment is up 38 percent. A bronze plan typically offers lower premiums compared to a higher-tier gold or silver plan but has much higher deductibles, sometimes up to $18,000 for families.

“It remains to be seen if this will result in a higher rate of attrition as we get deeper into the year and customers grapple with premium costs and higher out-of-pocket spending,” the state said in a statement.

Major Obamacare health insurers are seeing similar trends in membership this year.

Oscar Health, a major ACA insurer, designed the “richest possible” bronze plans for the 2026 plan year “that would still be relatively affordable” as it projected enrollees who no longer qualified for subsidies would opt for the cheaper-premium plans, said Cathy Grason, head of government affairs at Oscar Health.

The insurer saw its ACA membership grow 56 percent in the first quarter of 2026 compared to the same time last year — possibly due to the new plans and because other insurers, like Aetna and soon Cigna, are leaving the Obamacare marketplace, which is projected to shrink after the subsidy lapse.

Tackling phantoms

Last year, the Trump administration and congressional Republicans largely opposed an extension of the enhanced subsidies, arguing the more generous tax credits have fueled fraudulent signups.

In the debate over extending the subsidies, Brian Blase, executive director of the influential right-leaning Paragon Health Institute, pointed to “phantom enrollees,” or people signed up for coverage without their knowledge by unscrupulous brokers, as another source of fraud.

The think tank released findings last year that up to 12 million Obamacare enrollees did not file claims in 2024. Paragon argued many of these people were “phantom” enrollees.

Blase said part of the 2026 enrollment drop is due to more effective policing of the phantom enrollees. He did not cite any data for this year and CMS has not mentioned phantom enrollees specifically as a problem.

Other experts have countered that there are legitimate reasons an enrollee might not file a claim.

“While there is compelling evidence of some fraudulent broker-driven enrollments, that evidence does not demonstrate that the number of such enrollments is large relative to Marketplace enrollment overall,” according to one analysis from the Brookings Institution.

Blase has said that the 30 states that rely on the federally run marketplace, HealthCare.gov, to manage ACA signups are more likely to see fraud. The federal government contracts enrollment out to independent brokers. By contrast, the state-run exchanges manage enrollment themselves.

Covered California, for instance, said that it has controls to monitor for duplicate enrollments — when people are enrolled in both the ACA and Medicaid — but said they do happen.

The exchange saw enrollment decline slightly by 5.6 percent this year compared with 2025 but a state official pinpointed the reason as affordability concerns, not fraud.

There are “lots of people talking to us who are real people who have been priced out of coverage,” said Jessica Altman, the exchange’s executive director, in an interview with POLITICO.

Noting the dueling narratives, Grason of Oscar Health said it remains to be seen how much drops in Obamacare enrollment can be attributed to one reason or the other.

“There were dire predictions for market shifts that some left-leaning states that are very pro-enhanced subsidy will call out, and the right side of the aisle wants to attribute it all to fraud,” Grason said. “We really need to see the data in the aggregate…to see where we land.”