The Centers for Medicare and Medicaid Services (CMS) announced on Wednesday the withdrawal of Obamacare subsidies for 189,000 individuals identified during 2026 as having duplicate coverage under Medicare, Medicaid, or the Children's Health Insurance Program (CHIP), or listed as deceased in federal databases. This action pertains to the Federal Health Insurance Marketplace.
This measure, confirmed in an official CMS statement, is part of the Trump administration's oversight of government payments to health insurance plans acquired through the Federal Marketplace of the Affordable Care Act (ACA).
According to CMS, the reviews conducted in 2026 are projected to prevent improper payments amounting to approximately $1.5 billion over the next year, a figure that constitutes an official estimate rather than a confirmed saving.
The implications of this decision are particularly significant for Obamacare beneficiaries, including Cuban residents in the United States, although CMS has not specified how many individuals of Cuban origin are impacted.
Who Might Lose Obamacare Subsidies?
The review primarily addresses two scenarios:
Duplicate Coverage: Beneficiaries receiving subsidies to purchase private insurance through the Federal Marketplace, who are also enrolled in Medicare, Medicaid, or CHIP.
Registered as Deceased: Enrollments that continue to receive subsidies despite federal databases indicating the beneficiary is deceased. However, the removal of the subsidy does not necessarily mean the cancellation of health insurance.
In cases of duplicate coverage, CMS withdraws the advance tax credit that lowers the monthly cost of the policy but does not automatically cancel the private plan. Beneficiaries can retain it if they are willing to pay the full premium themselves.
The situation differs when records show a person has died. If the information is not corrected within a specified time frame, CMS cancels both the subsidy and the insurance plan.
Steps to Take If You Receive a Notice: You Have 30 Days to Respond
CMS explained that those identified with potential duplications are notified and have 30 days to contest the information.
If there is no response within this period, the agency proceeds to remove the subsidy.
Nonetheless, even after these 30 days, affected individuals can appeal the decision or demonstrate that their Medicaid or CHIP coverage is nearing expiration to request the restoration of aid.
In the case of death records, the agency also allows 30 days to challenge the information before canceling coverage.
Therefore, individuals who receive a notification should carefully review their enrollment data, verify if they maintain any active public coverage, and respond within the indicated period.
They can also check the status of their plan and subsidies through the official HealthCare.gov portal.
Second Round of Obamacare Oversight
According to CMS, the Trump administration resumed periodic checks for duplicate coverage in Medicaid and CHIP in 2025, which had been suspended during Joe Biden's presidency.
In that initial phase, CMS removed Obamacare subsidies from approximately 551,000 individuals who also had Medicaid coverage.
The review coincides with other planned changes for Obamacare in 2027, when new immigration restrictions for accessing subsidies will take effect. Among those who will continue to be eligible for assistance, if they meet other requirements, are legal permanent residents and certain immigrants with the "Cuban-Haitian entrant" status, a condition not automatically acquired by having Cuban nationality.
CMS Administrator Mehmet Oz stated that the various control measures implemented by the government have generated savings of nearly $6 billion.
According to the official, the goal is to restore taxpayer confidence in the efficient use of resources allocated to public health programs.
FAQs on Obamacare Subsidy Changes
What are the main reasons for losing Obamacare subsidies?
The primary reasons include having duplicate coverage under programs like Medicare, Medicaid, or CHIP, and being incorrectly listed as deceased in federal databases.
How can affected individuals appeal the decision to remove subsidies?
Individuals can appeal by contesting the information within the 30-day notice period or by demonstrating that their other coverage is about to end, to request subsidy reinstatement.
Does the removal of subsidies lead to the cancellation of health insurance?
Not necessarily. In cases of duplicate coverage, the private plan can continue if the individual pays the full premium. However, if listed as deceased without correction, both the subsidy and insurance may be canceled.