Managed Care: CMS Report Highlights Drop in Improper Enrollments; Continues Acuity Debate

Research evidence excerpt

Managed Care: CMS Report Highlights Drop in Improper Enrollments; Continues Acuity Debate

John Stansel, CFA AC North America Equity Research

(1-212) 622-0083 29 June 2026 J P M O R G A N

john.stansel@jpmorgan.com

Figure 2: CMS Total Effectuated Enrollment by Month, 2024 vs. 2025 (July-December), Compared with

Policy Change

Notes: Medicaid Periodic Data Matching (PDM) is a CMS program integrity process that compares Medicaid and Children's Health Insurance

Program (CHIP) enrollment records with Affordable Care Act (ACA) Exchange enrollment records to identify people who are enrolled in both

programs simultaneously. Because most people enrolled in Medicaid or CHIP are not eligible to receive Advance Premium Tax Credits (APTCs)

for ACA Exchange coverage, these matches help prevent duplicate federally subsidized coverage. The FTR Recheck or the Failure-to-File-and-

Reconcile Recheck is a follow-up verification process used by CMS after the initial Open Enrollment Period to determine whether ACA Exchange

enrollees who said they had filed and reconciled their Advance Premium Tax Credits (APTCs) actually did so. Enrollment in the figure is national

enrollment, while numbers in text boxes refer to subsidy removals for FFE removals only

Source: CMS

If the theory that improper and phantom enrollment have a structurally lower MLR is

correct, there could be a mechanical upward shift in acuity based on the data in CMS’s

report. 2M of improper enrollment lost in early 2026 vs December 2025 would reflect

slightly less than 10% of total enrollment and would create HSD% pressure on MLR if the

phantom/improper enrollment had a <25% MLR. We think this could be captured by the

morbidity assumptions in 2026 bids; however, it is a point to monitor, and, all else equal, we