Affordable Care Act enrollees in NC kicked out. How many unclear.

Last week, the Centers for Medicare & Medicaid Services announced it had canceled health insurance for 760,000 people covered under Affordable Care Act marketplace plans, based on findings from an anti-fraud task force. Nobody seems to know how many North Carolina residents were affected by the purge.

The federal agency has been mum on the details regarding those supposed fraudulent enrollees. CMS declined to answer an inquiry from Carolina Public Press asking how many North Carolina residents were disenrolled.

The North Carolina Department of Health and Human Services doesn’t know the extent to which North Carolinians lost their insurance coverage, according to spokesperson Summer Tonizzo. Tonizzo clarified that DHHS doesn’t track or manage enrollment in ACA marketplace plans.

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The NC Navigator Consortium, an initiative led by Legal Aid of North Carolina that helps individuals enroll in the ACA marketplace, also said it had limited information about the plan cancellations.

Statewide enrollment in marketplace plans is already way down compared to previous years after Congress let COVID-era subsidies lapse at the end of 2025. Some worry that if the downward trend continues, more and more people could be priced out of having health insurance.

As costs soar, feds target suspected ACA fraud

Marketplace plans were an invention of the 2010 Affordable Care Act, which is the legislation informally known as Obamacare. These plans cater to people who neither qualify for government-sponsored insurance nor have access to insurance through an employer.

According to the most recent CMS data, 609,544 North Carolina residents are covered through the ACA marketplace. That is nearly 22% lower than it was last year, thanks to spikes in premiums caused by the expiration of enhanced subsidies meant to keep those plans affordable.

In the face of higher prices, some people are choosing to downgrade their coverage or forgo health insurance entirely.

CMS Administrator Mehmet Oz and Health and Human Services Secretary Robert F. Kennedy Jr. framed the ACA disenrollments as a win for taxpayers. They said in a joint statement that it would return $2.2 billion in taxpayer-funded subsidies.

However, the fraud crackdown likely won’t have much effect when it comes to Americans’ healthcare costs, according to Louise Norris, a health insurance expert who writes for the consumer guide healthinsurance.org.

“The actions to address fraud do nothing to help the millions of real enrollees whose coverage is much less affordable than it used to be,” Norris told CPP.

In North Carolina, premiums for marketplace plans are expected to increase by about 15% in 2027, Norris said. While the increase won’t be quite as steep as it was last year, the marketplace will remain unaffordable for many.

Scammers and ACA enrollment

As CMS tells it, the 760,000 individuals whose insurance was canceled were either fraudulent or didn’t exist at all.

Fraudulent enrollees refer to those who misstate their income in order to gain access to free or lower-cost plans. Phantom enrollees are unknowingly signed up for free plans by insurance brokers looking to collect a commission off of those enrollments.

Insurance companies will pay brokers up to $30 per month for each person they enroll in an ACA plan. Those commissions were an attractive incentive for scammers who had little trouble bypassing the lax security measures on the ACA marketplace website, Norris said.

According to a CMS spokesperson, all 760,000 canceled enrollments were “agent or broker assisted” and lacked critical identifying information such as a Social Security number or immigration document number.

In addition, all of the affected plans had $0 premiums and no filed claims. CMS gave insurance companies 30 days to attempt to contact the policy holders before canceling their plans on Aug. 31.

While CMS did not answer how many North Carolina residents were included among those suspected of fraudulent enrollments, data from the 2026 open enrollment period shows that 224,848 enrollees, just under a third of the state’s total, had premiums under $10 after accounting for subsidies.

CMS also said it’s investigating another 419,000 enrollees nationwide who it suspects are fraudulent. Any person who was improperly removed should contact the Marketplace Call Center and provide their Social Security number or immigration document number to be reinstated, the spokesperson added.

Could probe have canceled legitimate health plans?

The question of whether all 760,000 canceled enrollments were truly fraudulent remains unanswered. The reliability of the purge will depend on how many people contact CMS to get their health coverage reinstated, Norris said.

It’s not clear that the public will even be privy to that information.

“It’s possible that some of those people were disenrolled improperly … but I don’t know whether we will ever get any numbers from CMS on whether that actually happened to anyone,” Norris said.

Norris said it wasn’t outlandish to think that so many enrollees could be fraudulent given what we know about the marketplace’s inadequate security measures, but she also questioned the effectiveness of CMS’ attempts to reach the affected policy holders.

“They said that they had reached out to these people repeatedly and hadn’t heard from them, but that doesn’t tell us for sure that those people aren’t real, or that they didn’t actually want to be enrolled,” she said.

In a worst-case scenario, people eligible for free coverage through the ACA could lose their health insurance entirely, leaving them with few alternatives if they aren’t reinstated.

Sometimes, those people look to noninsurance options like short-term plans, healthcare sharing ministries or direct primary care. However, Norris emphasized that these do not come with the consumer protections guaranteed by the ACA.

“There’s a whole slew of buyer-beware caveats,” Norris said.

“Going outside the marketplace does come with its drawbacks.”

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