A second review of 419,000 enrollees runs past Election Day, and behavioral health providers face coverage that can vanish between intake and the claim.
Key Takeaways
- Coverage removed in bulk: CMS canceled about 315,000 federal marketplace enrollments covering more than 760,000 people on August 31, then ended subsidies for 189,000 dual-enrolled or deceased enrollees.
- The integrity case: HHS frames both actions as restored data matching and broker enforcement, and expects about $2.2 billion in premium tax credits returned from the cancellations.
- Errors in the sweep: Insurers confirm some canceled members have been reinstated, while CMS has not said how many, why each enrollment was canceled, or how long reinstatement takes.
- What providers should do: Reverify marketplace coverage at every visit through open enrollment, especially for new intakes, and plan for another round of cancellations from the 419,000-enrollee review in late November.
The federal Health Insurance Marketplace will open its 2027 enrollment period on November 1 having already canceled coverage for more than three quarters of a million people this year. On August 31, CMS canceled approximately 315,000 enrollments covering more than 760,000 individuals after concluding, in a review with insurers, that the enrollments were unauthorized. On October 14, HHS announced that CMS had also removed subsidies this year from 189,000 enrollees who held duplicate Medicare, Medicaid or CHIP coverage or whose federal records showed they had died.
On October 16, KFF Health News reported that not everyone removed should have been. Insurance industry sources told the outlet that CMS has reinstated a small number of people whose coverage was wrongly canceled, and the agency declined to provide data on the reasons behind the cancellations. A second review covering 419,000 more enrollments is underway.
For behavioral health and autism services organizations, the story is less about the political argument than about the patient at the front desk. Acuity reported this month that the marketplace has already shed 2.6 million paying members since the enhanced subsidies expired, while the members who remain use more behavioral health care. Cancellations at this scale add a different risk: coverage that looks valid at intake and is gone by the time the claim is adjudicated.
How CMS Selected 760,000 Marketplace Enrollments for Cancellation
CMS’s September 22 fact sheet describes the cancellations as the outcome of a joint review with insurers under the agency’s existing process for unauthorized enrollments. According to information CMS provided to KFF Health News, the agency in June flagged nearly 1.2 million enrollments that shared four warning signs: no Social Security number or immigration document number on the application, a broker involved in the sign-up, no monthly premium payment, and no contact with the insurer and no claims filed.
CMS then sent lists of those accounts to insurers and directed them to attempt contact at least two ways, such as a phone call and a letter. Enrollees had 30 days to respond with the missing information. Those who did not were disenrolled. The interim final rule CMS published September 23 states the end result: the canceled policies were enrolled with agent or broker assistance, without verified citizenship or immigration documentation, and insurers could neither identify claims nor establish contact with the consumer.
Under CMS’s existing guidance for unauthorized enrollments, a canceled policy is voided back to its effective date, as if it had never been in force, which lets CMS recoup the subsidies already paid. Insurers must send a termination notice, though the same guidance acknowledges that unauthorized enrollments may carry inaccurate contact information.
CMS expects the cancellations to return about $2.2 billion in advance premium tax credits. The same fact sheet announced a moratorium on registering new agents and brokers for 2027 who lack an active 2026 Exchange Agreement. CMS said enrollments by brokers who first registered for 2026 were 2.7 times more likely to be missing Social Security numbers and 1.4 times more likely to be found dually enrolled in Medicaid or CHIP than enrollments by longer-registered brokers. All existing agents and brokers must now re-verify their identity through Login.gov or ID.me, and broker-assisted applications must include verifiable Social Security or immigration document numbers for every applicant other than newborns.
The rule also lays out the scale of the problem CMS says it is answering. From 2023 through 2025, CMS received more than 624,000 consumer complaints of unauthorized enrollments or plan switches by agents or brokers that insurers confirmed, roughly 300,000 of them in 2025 alone. The same passage acknowledges that data from early 2026 already show a substantial decrease.
The broker moratorium is now in court. The National Association of Benefits and Insurance Professionals sued HHS and CMS in federal court in Maryland on October 15, arguing the freeze violates the Administrative Procedure Act, and asked for a temporary restraining order before open enrollment. In its opposition brief, the government noted that consumers bought more than 75 percent of federal marketplace plans with agent or broker help during the last open enrollment, that 84,012 agents and brokers had at least one active 2026 enrollment, and that CMS estimated about 19,000 new agents and brokers would have registered during the pause. A hearing on the restraining order was set for October 21. [placeholder: update with TRO ruling before publication]
The 189,000 Duplicate and Deceased Marketplace Enrollees
The October 14 announcement concerns a separate mechanism. Federal regulations require exchanges to check periodically for people in subsidized marketplace plans who also hold Medicaid or CHIP, a process known as Medicaid/CHIP Periodic Data Matching. HHS said those checks were paused for Medicaid and CHIP enrollees under the prior administration and restored in 2025, when CMS ended duplicate subsidies for about 551,000 people already covered by Medicaid.
“Taxpayers should not foot the bill for duplicate coverage or subsidies for people who have died,” HHS Secretary Robert F. Kennedy Jr. said in the release. CMS Administrator Dr. Mehmet Oz said the prior administration’s four-year pause created a backlog of hundreds of thousands of duplicate enrollments. HHS projects savings of about $1.5 billion over the next year.
The process gives flagged enrollees 30 days to dispute the finding before subsidies end. HHS says people may still appeal after that window, or show that their Medicaid or CHIP coverage is about to lapse, to regain subsidies. For records showing a death, CMS contacts the individual or the estate; if the record is not disputed within 30 days, both the subsidy and the plan end. Unlike the August cancellations, which CMS attributes to unauthorized broker activity, the agency’s leaders framed the duplicate findings as a failure to look for concurrent enrollment rather than as fraud by enrollees, KFF Health News reported.
ACA Reinstatements, and What CMS Has Not Disclosed
The administration has not said how many of the 760,000 have been put back. David Merritt, Senior Vice President of External Affairs at the Blue Cross Blue Shield Association, confirmed to KFF Health News that some BCBS members are among those reinstated and that CMS offers an expedited review for people who discover they were improperly disenrolled. Asked for data on the reasons for the cancellations, the CMS press office told the outlet it had no additional data to share.
Critics focus on the selection criteria. A year without claims is common for healthy enrollees, and a missing Social Security number can reflect an adult applying for coverage without seeking it for a child, policy analysts told KFF Health News. Katie Keith, a Director of the Center for Health Policy and the Law at Georgetown Law, told the outlet that some enrollments may well have been unauthorized while others were valid, and that without more information, “it’s almost impossible to tell.” Brookings Senior Fellow Matthew Fiedler said the approach was better than removing people at random but “likely to miss the mark.”
Supporters of the sweep read the same facts differently. Brian Blase of the Paragon Health Institute, whose research has supplied many of the enrollment fraud findings the administration cites, told KFF Health News he believes more than 99 percent of the cancellations involved zero-premium plans created without the consumer’s knowledge or people who do not exist. He and administration officials say anyone wrongly removed can be reinstated by calling the marketplace and supplying the missing information.
Why ACA Marketplace Cancellations Reach Behavioral Health Providers
Marketplace plans must cover mental health and substance use disorder services as essential health benefits, and in states whose benchmark plans include it, autism treatment as well. A canceled enrollment is a canceled behavioral health benefit, whatever the reason behind it.
The exposure is not evenly spread. The August cancellations, by CMS’s own description, reached only enrollments with no identifiable claims, so a patient already in active treatment with claims on file would not have met that test. The risk sits elsewhere: with legitimate enrollees who had not yet used their coverage and arrive at intake now, holding a plan that was voided months ago; with any of the 189,000 enrollees whose subsidies ended over a duplicate-coverage or death record that turns out to be wrong; and with whoever the 419,000-enrollment review sweeps in next.
Discovery is the problem. CMS did not announce the August 31 cancellations until September 22, and an enrollee who never saw the insurer’s outreach may not learn the plan is gone until a claim is denied. Adrianna McIntyre, Assistant Professor of Health Policy and Politics at the Harvard T.H. Chan School of Public Health, told KFF Health News that public reaction will depend on whether people discover the loss when they try to get care. For providers, that discovery happens at the claim, and for high-frequency services such as ABA, every week between a voided policy and a denied claim adds billed sessions with no payer behind them.
Families moving between Medicaid, CHIP and marketplace coverage as household income changes are also the population periodic data matching is designed to flag.
Medicaid-side changes add churn of their own next year. The window for retroactive Medicaid coverage shrinks on January 1, and community engagement requirements are being phased in under the 2025 reconciliation law. A patient removed from marketplace coverage this fall and enrolled in Medicaid later may have less retroactive protection to fall back on in 2027. Program integrity has become the dominant federal and state frame across Medicaid ABA as well, from New York’s six-month enrollment freeze for ABA providers to North Carolina’s plan-led fraud task force and the federal audit findings Acuity has tracked.
What Comes Next for Marketplace Enrollment Verification
The second phase is already moving. Insurers must report to CMS how many of the 419,000 additional enrollees under review fail to respond to outreach by around mid-to-late November, Merritt told KFF Health News. That puts the next round of potential cancellations inside the 2027 open enrollment period, which runs from November 1 through January 15 on HealthCare.gov, with December 15 the deadline for coverage starting January 1. Before open enrollment, CMS also plans to require electronic consumer authorization before an agent or broker can take any action on an application.
Geography will shape exposure. The cancellations apply only to states that use HealthCare.gov, and KFF Health News reported that the 21 states fully running their own marketplaces generally have stronger fraud controls and have reported few or none of the unauthorized sign-ups seen on the federal platform. Organizations operating across state lines should expect the verification burden to differ by market.
For revenue cycle teams, the practical response is to treat marketplace eligibility as something to check at each visit through at least January rather than once at intake, to flag marketplace patients in federal-platform states for closer monitoring, and to give front-desk staff the reinstatement path (the marketplace call center and CMS’s expedited review) so families who learn of a cancellation at check-in know where to go.
Acuity has requested comment from CMS on reinstatement counts and timelines.
The administration presents the cancellations as program integrity, and its critics as collateral damage. For a provider holding an unpaid claim, the distinction arrives after the fact either way.
