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(The Center Square) – The U.S. Department of Health and Human Services has moved to terminate subsidies for an additional 189,000 Affordable Care Act marketplace enrollments involving deceased individuals or people also covered by Medicare, Medicaid or CHIP, HHS Secretary Robert F. Kennedy Jr. said Wednesday.
The Centers for Medicare & Medicaid Services estimates the corrections will prevent $738 million in improper subsidy payments in 2026, equivalent to more than $1.5 billion in annualized savings.
Federal regulations require ACA marketplaces to cross-check enrollment records at least twice a year to identify people receiving subsidies who also have Medicaid or CHIP coverage. The checks were strengthened during President Donald Trump's first term but paused under former President Joe Biden to maintain continuous Medicaid and CHIP coverage during the COVID-19 public health emergency,according toa 2025 CMS press release.
CMS resumed the checks in 2025, terminating subsidies for approximately 551,000 duplicate enrollments that year.
Oz said Wednesday that “we’re not sure why [the pause] happened, but… there should be questions asked about that going forward.” He also credited the administration's efforts to address the resulting backlog with nearly $6 billion in savings to date.
Kennedy emphasized that terminating the subsidies did not mean stripping enrollees of their existing Medicare or Medicaid coverage, a distinction he suggested frequently gets overlooked.
“We’re not cutting people from Medicaid or Medicare or Obamacare or medical coverage,” Kennedy said. “The people who are double-enrolled ... are not gaining anything from that double enrollment — and they don’t even know it, in most cases, that they’re double-enrolled.”
Federal subsidies for ACA marketplace plans are paid directly to private insurers, which can continue receiving the payments even if enrollees never use their coverage.
Kennedy argued that insurance companies, managed care organizations and insurance brokers, rather than the individuals with duplicate coverage, are the ones benefiting financially from the improper enrollments.
Before terminating subsidies, CMS contacts affected enrollees and gives them 30 days to dispute the findings or resolve overlapping coverage. When records indicate an enrollee has died, the agency contacts the individual or their estate to verify the information.
“A data match does not prove fraud. Records can contain mistakes,” Kennedy said. “Some cases begin with an error; others may reveal deliberate abuse.”
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