CMS Finalizes Rule Targeting ACA Enrollment Fraud, Aims to Lower Premiums
The Centers for Medicare & Medicaid Services (CMS) is finalizing a new regulatory rule aimed at reducing individual health insurance premiums by an estimated 5% on average, potentially saving American taxpayers up to $12 billion in 2026. This initiative targets improper enrollments and fraud within the Affordable Care Act (ACA) Exchanges. CMS plans to repeal the monthly special enrollment period (SEP) for individuals at or below 150% of the federal poverty level, a provision previously exploited for unauthorized enrollments and plan switches by some brokers. The rule requires income verification for most new and auto-renewed premium subsidy enrollments to ensure eligibility.
Additional eligibility constraints for most SEP enrollments will close loopholes that allowed late enrollment, aiming to curb misuse of the system. There will also be a $5 monthly reduction in advanced premium tax credits for auto-renewed plans without eligibility verification. These policy changes are temporary, effective through the 2026 plan year, intended to immediately reduce improper federal fund distribution.
Critics, including health law and economics experts, express concerns that these rules could lead to millions losing ACA coverage, potentially increasing uninsured rates. They warn that the added administrative barriers may discourage healthier individuals from enrolling, which could raise premiums and reduce plan value due to lowered coverage and higher out-of-pocket costs. Estimates indicate up to 1.8 million people could lose coverage from these new rules, adding to those impacted by the expiration of enhanced premium tax credits.
CMS officials emphasize that these measures will strengthen marketplace integrity, reduce waste and fraud, and protect taxpayer dollars while ensuring coverage for eligible individuals. The agency also announced the exclusion of federal subsidies for specified sex-trait modification procedures in ACA coverage.
The 2025 Marketplace Integrity and Affordability Final Rule reflects a broader governmental focus on fiscal discipline and program integrity within health insurance exchanges. However, the debate continues over balancing fraud prevention and maintaining accessible health coverage amid evolving regulatory measures in the ACA market.