States Push Back on Trump Explanation for Massive Obamacare Enrollment Drop: 'Fraud Is Not a Driver of Coverage Loss'

The Trump administration says declining Obamacare enrollment this year reflects a crackdown on fraud. But state-run insurance exchanges and health policy analysts say rising premiums after the expiration of enhanced federal subsidies are pushing many Americans out of coverage instead, as Politico reports.

Federal data show Affordable Care Act enrollment fell by 1.2 million people as of March, dropping to 24.3 million nationwide. Trump administration officials, including Health and Human Services Secretary Robert F. Kennedy Jr., have argued the decline is largely tied to efforts to remove people who were improperly enrolled in multiple programs or fraudulently signed up through brokers.

"The only people who lost coverage were people who were never entitled to coverage," Kennedy told lawmakers during an April congressional hearing.

But officials from several state-run exchanges told POLITICO that affordability has emerged as the primary driver behind the drop in enrollment, particularly after enhanced ACA subsidies expired at the start of 2026. Those subsidies, first introduced in 2021, had capped premium costs for many middle-income households.

"Fraud is not a driver of coverage loss," Vermont's Department of Health Access said in a statement cited by the news site. "Based on the disenrolling population, the primary driver is affordability."

An analysis from health policy news site KFF News published last week found average monthly premium payments rose 58% in 2026, from $113 to $178, while average deductibles climbed 37% to a record $3,786. The report estimated average ACA enrollment could ultimately fall to about 17.5 million people this year, down sharply from 22.3 million in 2025.

The analysis also found that consumers earning just above the former subsidy threshold accounted for a disproportionate share of enrollment losses. People with incomes between 400% and 500% of the federal poverty level represented only 3% of marketplace enrollment in 2025 but accounted for 27% of the decline in sign-ups this year.

Several states reported specific groups dropping coverage at higher rates. Colorado saw larger declines among rural residents and adults over 55, while Massachusetts said many lawfully present immigrants lost access to subsidies under changes enacted last year.

Some consumers who kept coverage moved into lower-cost bronze plans with higher deductibles. Rhode Island reported bronze-plan enrollment rose 38% even as overall marketplace enrollment declined by 20%.