The Centers for Medicare & Medicaid Services (CMS) has finalized a significant rule aimed at reducing individual health insurance premiums by about 5% on average. This measure is expected to save taxpayers up to $12 billion in 2026 by addressing improper enrollments in the Affordable Care Act (ACA) Exchanges and reducing federal spending.
The 2025 Marketplace Integrity and Affordability Final Rule aims to enhance oversight, strengthen accountability, and ensure that taxpayer dollars are allocated only to eligible individuals. U.S. Health and Human Services Secretary Robert F. Kennedy, Jr. said, "We are strengthening health insurance markets for American families and protecting taxpayer dollars from waste, fraud, and abuse."
Improper ACA enrollments have led to widespread fraud due to weakened verification processes and expanded premium subsidies. In 2024 alone, an estimated 5 million people may have been improperly enrolled, costing taxpayers as much as $20 billion. CMS Administrator Dr. Mehmet Oz commented, "CMS is restoring integrity to ACA Exchanges by cracking down on fraud, protecting American taxpayer dollars, and ensuring coverage is there for those who truly need it."
To address these issues, CMS will repeal the monthly special enrollment period for certain income levels that some agents have exploited for unauthorized plan switching. Income verifications will be required to qualify for premium subsidies, and eligibility verifications will be conducted for most enrollments through special enrollment periods.
Additional measures include reducing advanced payments of the premium tax credit by $5 a month for auto re-enrolled individuals without eligibility verification and standardizing the Annual Open Enrollment Period starting with the 2027 plan year.
Some policies in this rule are temporary measures set to expire at the end of the 2026 plan year. The rule also prohibits federal subsidies from covering specified sex-trait modification procedures and reinstates a previous interpretation of "lawfully present" to exclude Deferred Action for Childhood Arrivals (DACA) recipients from ACA Exchange coverage eligibility.
The final rule can be accessed through the Federal Register or CMS's website.
Information from this article can be found here.
