The Centers for Medicare and Medicaid Services issued a final rule on Friday intended to crack down on what it calls improper enrollment in Affordable Care Act plans.
The 2025 Marketplace Integrity and Affordability Final Rule is projected to save taxpayers up to $12 billion in 2026 by combating improper enrollments, reining in federal spending and by making health insurance markets more affordable, CMS said. Research showed that in 2024, an estimated 5 million people may have been improperly enrolled, costing taxpayers as much as $20 billion.
The rule also lowers individual health insurance premiums by an estimated 5%, CMS said.
Also on Friday, CMS released the Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability Final Rule for issuers and brokers.
"We are strengthening health insurance markets for American families and protecting taxpayer dollars from waste, fraud, and abuse," said Health and Human Services Secretary Robert F. Kennedy, Jr. "With this rule, we're lowering marketplace premiums, expanding coverage for families and ensuring that illegal aliens do not receive taxpayer-funded health insurance."
WHY THIS MATTERS
In response, the American Hospital Association said that in April it had expressed concerns after the rule was proposed that CMS had estimated that 750,000 to 2 million consumers could lose their coverage due to the provisions.
WHAT THE FIRST RULE DOES
Many of the provisions reinstate policies finalized during the prior Trump administration, CMS said.
- The rule shortens the open enrollment period for the federal marketplace to Nov. 1-Dec. 15 starting in 2027, and limits open enrollment periods for state-based marketplaces to Nov. 1-Dec. 31.
- It makes a change to the premium adjustment percentage that would increase the maximum annual cost sharing limitation.
- It makes updates to the income verification process and pre-enrollment verification process for special enrollment periods, changes to the essential health benefits, modifications to the redetermination and re-enrollment processes.
- It ends a special enrollment period for low-income individuals. The monthly special enrollment period (SEP) for individuals with projected household incomes at or below 150% of the federal poverty level is being repealed as CMS said the policy was used by some agents and brokers to improperly enroll ineligible consumers and perform unauthorized plan switching to gain commissions.
- The rule requires income verifications to ensure people qualify for the premium subsidies they receive.
- It conducts eligibility verifications for the majority of enrollments through special enrollment periods, closingloopholes that allowed people to wait to enroll until they needed care and improving the risk pool, which can lower premiums for middle-class families not receiving subsidies, CMS said.
- It reduces advanced payments of the premium tax credit (APTC) by $5 a month for individuals who are auto re-enrolled in fully subsidized plans without eligibility verification.
- It standardizes the Annual Open Enrollment Period starting with the 2027 plan year so that it ends by Dec. 31 for all health insurance exchanges, encouraging people to maintain year-round health coverage rather than waiting until they get sick to enroll.
- It prohibits federal subsidies from being used to help cover the cost of specified sex-trait modification procedures to align an individual's physical appearance or body with an asserted identity that differs from the individual's sex.
- It reinstates HHS' long-standing 2012 interpretation of "lawfully present" to exclude Deferred Action for Childhood Arrivals (DACA) recipients from eligibility and enrollment in ACA exchange coverage and Basic Health Program (BHP) coverage in states that elect to operate a BHP, including APTC, premium tax credits and cost-sharing reductions.
A number of the policies CMS is finalizing are temporary measures to immediately tamp down on improper enrollments and the improper flow of federal funds. These policies will sunset at the end of the 2026 plan year, CMS said.
The second rule adopts the evidentiary standard CMS uses to assess whether to terminate an agent's, broker's or web-broker's marketplace agreements for non-compliance and sets other standards.
This includes finalizing the repeal of the rule that prohibits issuers from denying health insurance coverage based on unpaid past-due premiums.
THE LARGER TREND
In response to COVID-19, ACA premium subsidies were temporarily expanded and provided a larger subsidy to cover the full premium for people with incomes between 100% and 150% of the federal poverty line. CMS said it believes this temporary expansion of premium subsidies resulted in conditions that were exploited to improperly gain access to fully subsidized coverage.
Email the writer: SMorse@himss.org