Heading into the midterm elections, high healthcare costs rank among voters’ biggest concerns. But lately, there’s a twist giving the issue new momentum on campaign agendas: a focus on fraud in government health programs.
The administration of President Donald Trump has used claims of widespread wrongdoing to justify investigations, suspensions of billions of dollars in payments to states, and the cancellation of Affordable Care Act health coverage for hundreds of thousands of people.
The effort has opened a broader political fight over the extent of fraud and the administration’s response to it. Republicans say they’re safeguarding taxpayer dollars by going after bad actors. Democrats contend the administration has relied on insufficient evidence to target blue states and cut programs Republicans have long tried to shrink. Meanwhile, Trump’s pardons of executives convicted of healthcare fraud, administration moves to weaken some protections against abuses, and a high-profile error by Trump regulators stand in contrast with the administration’s proclaimed fraud-fighting goals.
The dispute is becoming a talking point for both parties leading up to the November election.
Republican candidates are trying to win voters’ confidence by emphasizing their efforts to halt what they say is the misuse of taxpayer dollars in federal health programs.
“Going after fraud gives Republicans a healthcare message when they would otherwise just be defending cuts to Medicaid and the Affordable Care Act,” said Larry Levitt, executive vice president for health policy at KFF, a health information nonprofit that includes KFF Health News. The approach, he said, helps “blunt” those attacks.
Democrats, however, traditionally have an advantage on healthcare in general, with polls showing voters are more likely to trust them with such issues. Now Democrats are portraying Republicans’ fraud crackdown as a cover for the GOP’s weakening of safety net programs. But the GOP messaging could resonate at the ballot box.
About 44% of voters — and 54% of Republican voters — say say fraud in government programs is “extremely important” for candidates to talk about, according to a KFF poll conducted in mid-September, suggesting the fraud focus might be connecting with the GOP base. Such fraud is also the top issue rural Republican voters want candidates to talk about, based on a separate survey by KFF and the Associated Press.
It’s an issue that is hardly new, and government watchdogs have repeatedly documented fraud by health providers and brokers, as well as improper enrollment in government health programs. A report by the Government Accountability Office in March warned that the “sheer amount of payments in the Medicare program creates significant fraud risks.” And in a separate probe, GAO investigators were able to get subsidized insurance for fake ACA enrollees.
What has changed is the prominence the issue now occupies in national politics.
Administration’s Fraud Targets
Trump administration authorities have this year charged hundreds of people, including doctors, in alleged billing schemes. It has announced audits of state Medicaid fraud units and increased scrutiny of enrollment in federal programs, withholding billions of dollars in federal Medicaid payments over claims of lax oversight — with what Democrats say is a laser focus on blue states despite a lack of evidence.
The administration’s more expansive claims about fraud — and the actions it has taken in response — have generated fierce political clashes.
Most recently, the Centers for Medicare & Medicaid Services canceled ACA enrollments covering 760,000 people. While Democrats have questioned the methods that found them to be fraudulent, federal officials said they included nonexistent consumers whose applications were submitted by brokers or agents who can earn commissions from insurers.
CMS Administrator Mehmet Oz said at a press event that the cancellations included people who had coverage through the ACA but hadn’t used it. He also said some had no Social Security numbers, calling that evidence of problems.
“About 35% of current people on the Obamacare system — 35%, more than a third — had never used the program. They haven’t bought a prescription medication. They haven’t seen a doctor. That just is not possible,” Oz said. “So we know there is fraud.”
Democrats and some health policy analysts challenge that conclusion. They say that younger and healthier people are much less likely to use their insurance and that not using their coverage doesn’t mean they were improperly enrolled. Critics also say the absence of Social Security numbers doesn’t necessarily establish fraud; for example, newborns can be added to their parents’ plans before receiving a number.
“This is yet another attempt by the Trump administration to kick hundreds of thousands of vulnerable Americans off their healthcare,” Rep. Melanie Stansbury (D-N.M.) posted on the social media site X. “Millions are already struggling to access healthcare—and this is their plan?”
There are political risks for the GOP as well. The disenrollment of alleged phantom accounts is likely to ensnare legitimate consumers, say health analysts and ACA advocates, leading to a potential backlash against Republicans if scores of people lose coverage just before the midterm elections.
States that tend to deliver for GOP candidates will be hit especially hard, they say, because ACA enrollees are concentrated in those states. The 4.5 million people in Florida and 4.1 million in Texas who have marketplace coverage account for nearly 40% of the country’s ACA enrollment, according to a KFF analysis.
Conservative health policy advisers say the administration took multiple steps to avoid canceling legitimate coverage, including attempts to contact consumers and requirements that additional criteria be met before coverage was terminated.
“Those criticizing the action either don't understand it or see some political advantage in mischaracterizing it,” said Brian Blase, president of Paragon Health Institute and a former Trump health policy adviser.
Democrats, meanwhile, highlight inconsistencies in the administration’s broader anti-fraud campaign.
They note that the Department of Health and Human Services last year recertified hundreds of insurance brokers and agents who had been suspended in 2024 by the Biden administration for suspected fraud or abuse. The Trump administration also laid off about 200 employees from a CMS office involved in regional oversight of the ACA marketplace.
On Oct. 3, Trump called on Congress to pass legislation with mandatory prison terms for defrauding Medicare and Medicaid, eliminating probation as an option.
But Trump has also pardoned health industry executives convicted of major fraud schemes, including people who are connected to his political allies or who spent heavily on lobbying on their behalf. The pardons included a nursing home operator sentenced to three years in prison for a nearly $40 million tax scheme and, in Trump’s first term, five executives at a Florida company convicted for Medicaid fraud.
Trump’s pardons in 2021 of executives who profited from massive public healthcare fraud spurred criticism from the National Health Care Anti-Fraud Association. Critics now say the administration is portraying cuts to Medicare and Medicaid as necessary for weeding out waste, fraud, and abuse while exonerating criminals who have engaged in some of the biggest schemes in federal health programs.
Blue State Allegations
HHS has raised concerns about Medicaid fraud and program integrity in several states, and the administration has deferred or threatened to cut federal Medicaid funding while disputes are investigated.
Democrats say the administration is itself engaging in fraud by using unsubstantiated allegations of abuse to politically target blue states.
One of the most striking clashes occurred in New York.
Federal officials launched an investigation of the state’s Medicaid program after claiming that personal care services — including help with bathing, dressing, and meal preparation — had been provided to more than 5 million people, which would have amounted to roughly three-quarters of the state’s Medicaid population — an almost impossibly large proportion.
“It is time for New York to come clean about its Medicaid program,” CMS’ Oz posted in March on X.
CMS later acknowledged its calculations were wrong. The agency said that it had misunderstood the state’s billing codes and that the actual number of beneficiaries who received the services was closer to 450,000. The administration continued its scrutiny of the New York program, however, and later suspended millions of dollars in federal funding for the state’s Medicaid fraud unit, saying the division wasn’t producing enough indictments.
The administration also withheld about $2 billion in Medicaid funding from California, citing concerns about program integrity and oversight of some home medical services. State officials deny the allegations, saying spending on home services has grown because of factors such as higher wages for home health aides and an increase the number of older people receiving care.
The White House announced plans to defer more than $500 million in federal funds from Minnesota, claiming the state had failed to protect its Medicaid program from abuse. State officials have defended their oversight and gone to court to challenge the decision.
Vice President JD Vance, who chairs Trump's Task Force to Eliminate Fraud, and other administration officials announced the state deferrals at the White House, giving what traditionally would have been technical disputes between state and federal health officials a much higher political profile. Vance’s office did not respond to KFF Health News questions about the administration’s anti-fraud activities related to healthcare.
“I’ve never seen anything like this,” said Andy Schneider, a Georgetown University research professor and a senior adviser at CMS during the Obama administration. “It’s a deferral, not a finding of fraud. This is being elevated by political decision-makers.”
Republican candidates have pounced on the investigations and allegations. In Minnesota, Republican gubernatorial candidate Lisa Demuth, who is speaker of the Minnesota House, released a September ad claiming that her Democratic opponent, U.S. Sen. Amy Klobuchar, “has never done anything to stop the fraud here in Minnesota.” Klobuchar has said that as governor she would “launch a top-to-bottom audit of state government to root out fraud.”
In New York, Attorney General Letitia James, a Democrat whose office runs the Medicaid fraud unit, criticized the decision to withhold funds and said weakening the operation would benefit criminals. Her Republican challenger in the November election, Saritha Komatireddy, has cited the Trump administration’s claims during her campaign, telling Fox News Digital that James is “totally failing to prosecute Medicaid fraud.”
The administration says its actions are necessary because fraud diverts taxpayer money from people who legitimately qualify for government programs.
“The fraud doesn’t just steal money — it steals our trust,” Oz said in August on CBS’ Face the Nation.
Democrats and healthcare advocates say the White House’s anti-fraud crusade is being used by Republicans to distract from criticisms over its sweeping funding cuts to Medicaid, the ACA, and other federal health programs.
Republican-backed legislation enacted last year is projected to reduce federal Medicaid spending by hundreds of billions of dollars over a decade.
Congressional Republicans also declined to extend enhanced ACA premium subsidies that expired at the end of 2025, increasing premium costs for many people who buy insurance through the marketplaces. Enrollment has since declined by millions.
Overall, the combined effect of GOP-led changes will result in 16 million more uninsured people by 2034, according to an analysis by the Congressional Budget Office.
Those changes have given Democrats an opening to campaign on protecting healthcare coverage and affordability while Republicans seek to shift some of the debate toward fraud and government spending.
“It’s really a way to distract and reframe the cuts in a different way, to say it’s part of an anti-fraud effort,” said Anthony Wright, executive director of Families USA, an advocacy group focused on expanding health coverage. “Fighting fraud shouldn’t result in people losing coverage.”
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.