Some of the people on the list don’t know they’re enrolled at all, according to Vice President JD Vance. On Tuesday, Vance’s antifraud task force and Dr. Mehmet Oz, who runs the Centers for Medicare and Medicaid Services, said they’re canceling subsidy payments for 760,000 Affordable Care Act exchange accounts they call unauthorized or fraudulent, for an estimated $2.2 billion in savings. The Journal ranks it among the biggest administrative purges of the individual exchanges since the administration’s fraud crackdown began last year.
Besides the unaware, officials cited people who aren’t eligible because they have employer coverage and people whose income is above 400% of the federal poverty level, which HHS sets at $15,650 for one person and $32,150 for a family of four. CMS is also cutting off hundreds of agents and brokers and freezing new ones nationwide; brokers, paid by insurers, can get up to $25 a month per new enrollee, and officials say some signed people up without checking identification. Exchange enrollment rose from about 10 million to more than 22 million under the Biden administration, and an HHS report this year estimated that likely improper, phantom or fraudulent sign-ups made up nearly half of new enrollments from 2021 to 2024.
Others raise doubts. Cynthia Cox, a senior vice president at the health-research nonprofit KFF, says some of the people losing coverage may have been legitimately enrolled, and Brad Woodhouse, president of the advocacy group Protect Our Care, calls the effort a smokescreen.
The line that matters before 65
The detail that matters most for anyone retiring before Medicare comes near the end: the Covid-era relief that removed the income cap on subsidies lapsed at the end of 2025, though Democrats and some Republicans pushed to extend it. That makes 400% of the poverty level a cliff again. By our arithmetic from those HHS figures, which set the line for 2026 coverage, that’s $62,600 of income for one person and $128,600 for a family of four, and a household just over the line doesn’t get a smaller subsidy — it gets none. The dollar line resets each year when HHS updates its figures.
Our read
Two moves, neither of them political (M11, insurance; M10, retirement). First, housekeeping: if anyone in your household buys coverage on an exchange, log in and confirm the enrollment is yours, the income on file is current and you know who your broker is, and answer any notice asking you to verify eligibility. Second, manage income against the line. Subsidies key off modified adjusted gross income, and it’s easy to push up fast with a Roth conversion, a traditional IRA withdrawal or a year-end capital gain; a conversion that looks efficient on the tax return can cost a year of subsidies if it lands you over 400%.
Subsidies are usually paid in advance on estimated income and squared up on the tax return, so a surprise December gain that lifts income over the line can mean paying back the whole year’s subsidy in April. If you’re planning to leave work before 65, price the years until Medicare with the cliff in the math — a fifteen-minute conversation that’s worth more before the retirement date than after the first renewal notice.