A recent US Department of Health and Human Services (HHS) report indicates that the Centers for Medicare & Medicaid Services (CMS) is taking action to identify and remove potentially unauthorized Affordable Care Act (ACA) Marketplace enrollments. These actions could have significant implications for individual ACA market issuers, including changes in morbidity, risk adjustment transfers, financial reporting, administrative costs, and future pricing.
In Wakely’s new report, Implications for Potential Marketplace Unauthorized Enrollment Actions, we examine the potential effects of Marketplace disenrollment actions and highlight considerations for health insurers in 2026 and beyond.
DOWNLOAD NOWKey Takeaways
CMS has identified approximately 1 million highly suspicious agent- and broker-assisted HealthCare.gov enrollments involving applications without a Social Security number (SSN) and members paying no premium, according to a June 2026 HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) report.
An application without an SSN does not itself indicate an improper or unauthorized enrollment; however, the ASPE report emphasizes CMS’s efforts to prevent unauthorized enrollments, creating the possibility that some of these enrollments will be terminated.
The potential effects extend beyond insurers whose members are directly disenrolled. Significant Marketplace disenrollment could affect the overall risk pool and consequently influence insurers throughout affected markets.
Potential Implications for ACA Marketplace Issuers
Morbidity
If disenrolled members are disproportionately healthier or have limited healthcare utilization, removing them could increase average market morbidity and claims per member. For example, if all disenrolled members were non-utilizers and represented 10 percent of enrollment, average claims per member per month would increase by approximately 10 percent.
Risk Adjustment Transfers
Changes in market morbidity and enrollment could materially affect ACA risk adjustment transfers. The effects are unlikely to be uniform across insurers because issuers may have significantly different concentrations of potentially affected members.
Issuers with relatively high concentrations of disenrolled members could experience more favorable risk adjustment results while simultaneously experiencing higher average claim costs. Changes in risk adjustment therefore may not fully offset changes in claims.
Accruals and Financial Reporting
Potential retrospective or prospective disenrollments could affect several financial reporting components, including:
- Premium and advanced premium tax credit (APTC) accruals
- Risk adjustment transfer accruals
- Per member claims cost estimates
- Premium deficiency reserve considerations
The financial effect could be particularly significant if CMS retrospectively terminates coverage to members’ original effective dates and recoups previously paid APTCs.
Administrative Costs
Lower enrollment means less premium revenue over which insurers can spread fixed administrative expenses, potentially creating additional pressure on financial results and future pricing.
2027 and 2028 Pricing
Changes in morbidity could ultimately increase required premium rates. Because plan year 2027 rates are already undergoing final approval, issuers may have limited ability to reflect emerging enrollment changes in those rates. Potential implications may therefore become a key consideration in 2028 pricing.
Distribution Channels
CMS has indicated an intention to terminate agents and brokers responsible for facilitating unauthorized enrollments. Issuers may need to evaluate their broker and agent distribution channels and consider how changes could influence future enrollment and morbidity.
State and Market Variability
The effects are expected to be concentrated in federally facilitated exchange states rather than state-based exchanges. The magnitude of the impact could vary substantially by state, county, insurer, and product.
Issuers with heavier concentrations of members in low- or $0-net premium plans, heavier reliance on brokers, significant autoenrollment, or competitively priced lower cost plans may experience greater effects.
What Health Insurers Should Consider
Issuers should evaluate their exposure to potential Marketplace disenrollment and consider how different scenarios could affect membership, morbidity, claims, APTCs, risk adjustment, financial accruals, administrative expenses, and future premium rates.
Particular attention should be given to the timing of any CMS action. Retrospective enrollment rescissions could produce substantially different financial consequences than prospective coverage terminations.
Issuers also should account for significant uncertainty. The number and characteristics of affected members, timing of terminations, issuer processing speeds, and possibility of additional actions in 2027 remain unclear.
