First, it seems like they had an extremely low bar for declaring these accounts as fraudulent, essentially making the default assumption that they were fraudulent and putting the burden of proof on the policy holders to show that they were legit. Absent pretty strong evidence, that’s not a good approach if you actually are trying to serve the public and meet program goals. (It’s possible they had evidence, but the article doesn’t really say, and the limited comments from the government about what they did don’t inspire confidence.)

Second, it’s not clear what the actual fraud scheme here is. And regardless, the real targets of anti-fraud action should be the fraudsters. They should be bringing prosecutions against the people making money, not just cancelling policies.

Because there are two potential fraud schemes here, and in neither of them is the policy holder the one benefiting. One option (which kind of fits the “broker” comment) is that the insurance companies are defrauding the government by registering fake account holders then getting government subsidies for those account holders. (Does the ACA work this way, via direct government payments to insurers, as opposed to tax credits/refunds to individuals?) But if this is the play, they should be going after the companies.

The second option is medical providers, who could be defrauding insurance companies by filing claims for services supposedly provided for the fake account holders. This seems overly complex to me and unlikely to be really widespread. It would be smaller numbers with an occasional doctor committing fraud, not a big national trend.

But the policy holders, even if they get subsidies, are still paying money out of pocket for premiums. Getting a discount but still spending money is not a moneymaking fraud scheme.