As Trump administration purges 760,000 from Affordable Care Act, how much fraud is there in NYS health marketplace?

A federal fraud probe that kicked 760,000 Americans off Affordable Care Act coverage didn't include New York, but it raised questions about safeguards New York has in place to prevent fraud, and about whether the mass purge included people with valid coverage.

The investigation, announced by Vice President JD Vance this week, examined the federal exchange, which provides the platform for consumers to sign up for healthcare coverage in 28 states. New York, however, has its own exchange and wasn't subject to the review.

Newsday reached out to health policy experts for their take on the federal ACA probe and what it might mean for New York.  

How common is fraud in New York’s ACA exchange?

While there are warning signs for other New York State-run health programs, fraud in the state's ACA healthcare marketplace is uncommon, according to Bill Hammond, a senior fellow who focuses on health policy at the Manhattan Institute, a conservative, Manhattan-based think tank.

"If it exists at all in New York, it's not as widespread as it would be in other states," he said. "New York has its own exchange, and the evidence is that it's the federal exchange" where the most fraud occurs.

There are 271,511 New Yorkers, including 25,971 people in Nassau and 26,525 in Suffolk, on traditional ACA "qualified health plans" purchased via the state exchange, state Health Department data shows.

There have been few cases of fraud with that program, and "the state has appropriate mechanisms to deal with those few that have been identified," Elisabeth Benjamin, vice president of health initiatives for the Manhattan-based Community Service Society, which helps people on Long Island and elsewhere sign up for ACA coverage, said in an email.

But there are indications that there are many ineligible people on a separate state-run program — the Essential Plan, which is for people with low incomes who make too much to qualify for Medicaid — and on Medicaid, Hammond said. He said the state is not doing enough to root out fraud in those programs.

What safeguards does New York have in place to prevent fraud?

The state Department of Health in a statement to Newsday said it has checks in place aimed at deterring fraudulent enrollment, including relying on "a range of trusted federal and state electronic data sources that are regularly refreshed to confirm applicants’ eligibility." The state said its verification "processes are regularly audited by federal, state, and independent auditors."

Were all of those 760,000 people fraudulently enrolled?

Jason Levitis, a senior fellow at the Washington, D.C.-based Urban Institute, said it’s still unclear what criteria the government used to purge the ACA rolls.

"It’s crucial to go after fraud whenever you can," he said. "But you have to do so following the rules, and you have to be fair and transparent about it. Here CMS hasn’t really explained what they did."

The White House referred questions to Vance’s press office, which did not return Newsday’s emails seeking comment. The Centers for Medicaid & Medicare Services also did not respond to a request for comment.

Trump administration officials said much of the fraud on the federal exchange involved brokers who either signed up people without their knowledge or submitted fictitious names — and then earned enrollment commissions.

There appear to be few details on whether people cut from the program were given an adequate chance to challenge their removal from Obamacare rolls, said Vanessa Baird-Streeter, president and CEO of the nonprofit Health and Welfare Council of Long Island, which helps people enroll for ACA coverage.

She said she’s concerned that some people who did not commit fraud, including those who may have made an honest mistake in paperwork, may have been ensnared in the purging of names.

Hammond said it appears as if the government was removing people from coverage en masse, based on evidence that it believed pointed to fraud.

"That's not the normal way of enforcing against fraud," he said. "When you do that, you have to go case by case with specific evidence about specific individuals, and this sounds like it's more of a categorical action."

Is there a lot of fraud in the ACA?

A December 2025 review by the U.S. Government Accountability Office found instances where auditors were able to enroll in the federal marketplace without providing verification of their Social Security number.

"There is zero doubt there is significant waste, fraud and abuse in this program," Hammond said.

Previous administrations did not do enough to combat it, he said. But "there’s a risk this administration is going too far in the other direction," he said.

"There’s a chance that in the kind of wholesale way they're doing it, they're going to kick somebody off who actually needs and deserves the coverage," Hammond said.

"I think it's good that they seem to be taking the broker fraud problem seriously," Levitis said. "But then they are using it as an excuse just to go after consumers as well."

Will the federal government mount a similar crackdown on state programs?

Levitis, a former senior U.S. Treasury official under the Obama administration, said that the Trump administration, through laws, regulations and administrative actions, has tried to undermine the ACA, "so it only makes sense to be concerned that there will be more along those lines, including actions like this, coming to state-based marketplaces in the future."

Vance, who launched the ACA probe as part of his ongoing "anti-fraud task force," has already taken aim at New York, headlining a task-force event in Bethpage in June, where he accused the Hochul administration of mismanaging a Medicare program to provide at-home care to disabled Medicare patients. The state Department of Health has called his claims "baseless."