CMS rule cracks down on ACA fraud and strengthens state control

The Centers for Medicare & Medicaid Services issued a sweeping rule to strengthen oversight of the Affordable Care Act exchanges for plan year 2027 by lowering user fees, tightening eligibility verification and giving states greater authority over plan oversight.

The final rule reduces federal exchange user fees to help lower premiums, establishes new safeguards to prevent improper enrollments and ensures subsidies go only to eligible individuals. The rule also increases consumer choice, affordability, access and protections while expanding state flexibility to manage exchange operations.

“American taxpayers deserve to know their dollars are going only to people who truly qualify,” said CMS Administrator Dr. Mehmet Oz. “This rule strengthens eligibility checks, cracks down on abuse, and gives insurers more flexibility to offer affordable, consumer-focused coverage options.”

The rule reinstates pre-enrollment verification for Special Enrollment Periods, requires additional income documentation in certain cases, and aligns eligibility for advance payments of the premium tax credit with provisions of the Working Families Tax Cut legislation. These changes ensure that federal subsidies are reserved for eligible individuals and reduce the risk of improper enrollments. It also strengthens oversight of health insurance agents and brokers by clarifying prohibited marketing practices and standardizing documentation to support consumer consent and eligibility application review.

CMS is removing the requirement for Qualified Health Plan issuers using HealthCare.gov to offer standardized plan options and limits on the number of non-standardized plan options issuers can offer. CMS also establishes a new pathway for certain plans that do not use a network of providers (non-network plans) to become certified as a QHP.

The final rule allows issuers to offer catastrophic plans with terms of up to 10 consecutive plan years and expands hardship exemption eligibility to enroll in catastrophic coverage, giving more consumers access to lower-cost coverage options. Additional changes to cost-sharing parameters increase flexibility for issuers designing individual market bronze and catastrophic plans.

Several provisions will allow states to strengthen oversight over their exchanges by providing states flexibility to tailor their own certification reviews to address local market conditions. Federally-facilitated exchange states that meet federal standards may elect to conduct their own provider access and/or essential community provider reviews, with CMS support as needed. The rule also simplifies exchange operations by removing the transition period for states moving from an FFE to a state-based exchange.

The final rule includes targeted steps to control costs and encourage more flexible plan design. Beginning in plan year 2028, states will be required to defray the cost of benefits they mandate that are in addition to essential health benefits, regardless of whether the benefit is in the state’s EHB-benchmark plan. In addition, CMS is finalizing a policy to prohibit issuers from including routine non-pediatric dental services as an EHB. CMS is also requiring greater transparency in rate filings, including how issuers account for unreimbursed cost-sharing reductions. CMS is also finalizing lower user fee rates—1.9% for the FFE and 1.5% for SBEs on the federal platform—down from 2.5% and 2.0% in 2026, respectively. These reductions are expected to help put downward pressure on premiums in 2027.

To view the 2027 Payment Notice final rule, visit: https://www.cms.gov/marketplace/resources/regulations-guidance

To view the related CMS fact sheet, visit: https://www.cms.gov/newsroom/fact-sheets/hhs-notice-benefit-payment-parameters-2027-final-rule