Trump Admin Cuts 760,000 From Obamacare Coverage, Claiming Fraud

Vance and other officials held a news conference Tuesday.
Reuters
By Yuval Rosenberg and Michael Rainey

Happy Tuesday! Fall starts this evening - 8:05 p.m. EDT, to be precise. So enjoy your pumpkin spice whatevers if you so choose, but we'll be mourning the end of summer for at least a few more days. The seasonal change isn't made any easier by the fact that it's United Nations General Assembly week here in New York, meaning that the cooler temperatures are accompanied by an influx of world leaders causing even worse traffic while they speechify about global problems.

Speaking of which: President Trump today defended his Iran war and issued another threat: "I have a big decision to make," Trump said. "Will a deal be made with Iran that lets them rebuild and create a far greater country than it ever was before, maybe one of the greatest in the Middle East or even the world? Or do I annihilate the Islamic Republic and do it quickly, never giving them a chance to kill and destroy people and countries again? Do I drive them into hell with no chance of survival and no hope of future greatness or generations?"

Here's what else is happening.

Trump Admin Cuts 760,000 From Obamacare Coverage, Claiming Fraud

The Trump administration plans to cancel health insurance for more than 760,000 people who obtained their coverage through the public exchanges established by the Affordable Care Act, alleging that the individuals are ineligible or do not exist.

Vice President JD Vance, who leads a federal task force focused on rooting out fraud, said Tuesday that the effort would save the government $2.2 billion in healthcare spending.

"We're actually making sure that the people receiving Obamacare subsidies are actually entitled to receive them," Vance told reporters at a press conference. "Amazingly, we weren't doing that before."

Vance said the task force is also checking the eligibility of about 419,000 people who they suspect are fraudulently enrolled in Obamacare plans. "We're going to make sure that they're first of all legal residents of the United States of America, and second of all, we're going to make sure that they actually meet the income threshold requirements in order to receive these Obamacare benefits," Vance said.

Focus on brokers: Vance blamed the Biden administration for providing incentives to brokers who sign up people for healthcare benefits, saying the system, combined with lax eligibility monitoring, led to "rampant fraud."

"In one case we found a fraud ring that had 40 agents, 40 brokerage agents who had funneled 50,000 people into the Obamacare system fraudulently," Vance said. "Now, some of those people were probably legitimate. Most of those people were not eligible [because] either they didn't meet the citizenship or the income requirements. Many of those people quite literally didn't even exist."

Joining Vance at the press conference, Dr. Mehmet Oz, the administrator for the Centers for Medicare and Medicaid Services, announced a national moratorium on new brokers. "There will be no new brokers for Obamacare in this country for the next six months," Oz said, adding that a "disproportionate amount of the fraud is taking place from these individuals."

In a press release, CMS outlined other steps the agency is taking to reduce fraud in the ACA exchanges, including recertifying existing brokers, requiring Social Security numbers for all applicants and blocking brokers and agents from completing forms that are the responsibility of applicants.

By the numbers: About 19 million people receive health insurance through the Obamacare exchanges, so the reduction announced Tuesday amounts to roughly 4% of current enrollment, per The New York Times.

During the Covid pandemic, the Biden administration pushed to expand access to healthcare plans sold on the public exchanges, and total enrollment jumped from about 10 million to more than 22 million. That number started dropping after Congress declined to extend generous subsidies that lowered the cost of insurance for millions of enrollees.

Trump administration officials have claimed that there are still millions of ineligible or fraudulent enrollees in ACA plans. In his comments Tuesday, Oz said he expects to remove more enrollees in the future. "These are not real people," Oz said. "We're not paying insurance for non-existent ghosts."

Collins Warns Trump Admin to Back Off NIH Funding Shakeup

Sen. Susan Collins, the Republican chair of the powerful Senate Appropriations Committee, is warning the Trump administration against following through on a proposed executive order that would give the White House political control over grantmaking by the National Institutes of Health.

In a statement issued Monday and a letter today to the heads of President Trump's budget office and the NIH, Collins argues that the White House Office of Management and Budget should not be involved in agency grant awards.

"Any attempt to politicize grantmaking at the National Institutes of Health (NIH), or any other agency, by another means-whether an Executive Order or guidance-is contrary to congressional intent," Collins said in her statement yesterday. "Imposing a political review on awards that have already been selected through a rigorous scientific and merit-based process undermines the long-standing principle that the government funds awards based on scientific need and merit, rather than political ideology."

Sen. Patty Murray, the top Democratic appropriator, similarly criticized the Trump administration plan.

"Whether lifesaving medical research gets funded or not should be determined by experts at the NIH-not a panel of lackeys chosen by Donald Trump and Russ Vought," Murray said in a statement Monday. "Under this scheme, a single political appointee could kill a cancer study or an Alzheimer's trial with no scientific reason at all. ... Breast cancer patients shouldn't be denied hope of a new lifesaving treatment because Russ Vought thinks women's health research is woke."

How we got here: President Trump reportedly instructed White House budget director Russell Vought last week to draft a presidential order creating a board to decide how billions of dollars in grants would be awarded - a move that would put political appointees in charge of federal health research funding that, as Collins indicated, has long been rooted in peer-reviewed assessments of scientific merit, with decisions ultimately made by the heads of the NIH's 27 divisions.

The new board would include Vought and NIH Director Jay Bhattacharya and would be required to make grant awards unanimously, Politico reported. That would give Vought extraordinary power over the more than $35 billion in yearly NIH grants, the majority of the agency's nearly $50 billion in congressionally appropriated funding.

The plan for a new executive order reportedly came after a clash between Vought and NIH Director Jay Bhattacharya in which the budget chief accused the NIH, the largest U.S. funder of biomedical research, of providing money for "woke" programs that conflict with the president's agenda.

Bhattacharya defended the agency's grantmaking process, which has been revamped under Trump, according to The Washington Post. And he refused Trump's request to cut grant funding to Harvard specifically, according to Politico.

Vought has long targeted NIH for spending cuts. The president's budget request for fiscal year 2026 proposed to cut the NIH budget by about 40% compared to 2025 levels. Congress rejected that request. For fiscal year 2027, the White House asked for a roughly 12% budget cut for the NIH, or a reduction of about $5 billion.

In an interview with CBS News's "Face the Nation" in July 2025, Vought criticized what he described as wasteful spending on specific research programs and argued that the NIH had been "weaponized against the American people" by funding research that he claimed had caused the Covid pandemic.

"We have an agency that needs dramatic overhaul," Vought said at the time. "Thankfully, we have a great new head of it, but we're going to have to go line by line to make sure the NIH is funded properly."

More recently, Vought's White House budget office proposed a rule that would give political appointees oversight over federal health grants. Collins and other lawmakers criticized that plan, and Congress blocked it from being finalized until December as part of the continuing resolution, or CR, enacted to fund agencies past the midterm elections.

In her letter Tuesday, Collins said the nascent executive order appears similar to the plan Congress recently blocked. "I urge you not to move forward with this proposal, which would undermine the intent of the CR provision and more important, the Federal government's objective of funding biomedical research projects based on scientific merit and value rather than political ideology," she wrote, echoing her earlier statement.

Collins went on to defend U.S. research and development, citing advances dealing with Alzheimer's disease, Type 1 diabetes and cancer.

"Every application for NIH funding undergoes a long and demanding review process that includes committees of outside experts who review the applications and evaluate them based on merit," Collins wrote. "In addition, Director Bhattacharya has worked to prioritize innovation so that NIH is funding meritorious applications focused on cutting-edge science that will ultimately result in cures for rare and chronic diseases as well as better treatments to improve American lives."

Collins closed her letter by urging Vought and Bhattacharya to bring a legislative proposal to Congress if they want additional reforms at NIH.

Senate Dems Warn That Trump Admin Plans to Kill $3.2 Billion in Foreign Aid

Democratic Sens. Patty Murray and Brian Schatz said Tuesday they are concerned that the Trump administration plans to redirect $2.5 billion in foreign aid funding while allowing another $725 million to expire at the end of the fiscal year on September 30.

Congress provided $1.3 billion for global health programs and $1.2 billion for development assistance in fiscal year 2025, but the Trump administration plans to redirect those funds to pay for "USAID closeout costs," the senators said in a joint statement, referring to the federal agency responsible for foreign aid that was dismantled by the Trump administration last year.

The senators also accused the administration of impounding funds provided by Congress to fight drug and human trafficking ($115 million), provide aid in Europe and Eurasia to counter Russian influence ($310 million), and invest in American supply chains and competitiveness ($300 million).

"Cracking down on fentanyl trafficking, countering Putin, protecting Americans from global health threats-these are priorities just about everyone supports," the senators said. "But instead of spending funding Congress provided to support these common-sense objectives, the Trump administration is on track to permanently impound nearly a billion dollars and to commit billions more to pay for its brazen dismantlement of USAID instead of following the law that Congress passed and using those funds to save lives and advance bipartisan U.S. foreign policy objectives."

Per Politico, the White House has yet to respond to the allegations.

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