The Centers for Medicare & Medicaid Services (CMS) has finalized a rule that it says will address “the surge of improper enrollments” on Affordable Care Act (ACA) exchanges as well as take on wasteful spending.
The agency said late Friday that there are likely millions of people who were improperly enrolled in ACA exchange plans. The CMS said 5 million people may have been enrolled improperly in ACA plans in 2024 alone, citing data from the Paragon Health Institute, a think tank promoting a free market approach to healthcare.
The Paragon study estimates those potential improper enrollments cost taxpayers $20 billion last year.
“Improper ACA enrollments, enabled by weakened verification processes and expanded premium subsidies, have triggered widespread fraud,” the agency said in a press release.
Under the final rule, the CMS will end monthly special enrollment periods that allow individuals with incomes at or below 150% of the federal poverty level to sign up for coverage, arguing that these windows were used by some brokers and agents to improperly enroll people in ACA plans or switch them to different plans in a bid to secure higher commissions.
The final rule will also require income verifications for individuals who receive premium subsidies and will put in place eligibility verifications for people who sign up during special enrollment periods.
It also finalizes a plan to shorten the open enrollment period for ACA plans, with the window now set to end Dec. 31. Open enrollment had previously been extended to mid-January.
“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,” said CMS Administrator Mehmet Oz, M.D., in the press release. “This is about putting patients first, stopping exploitation of the system, and realigning the program with the values of personal responsibility and fiscal discipline.”
The agency also said it will reduce advanced premium tax credit payments by $5 per month for people who were automatically reenrolled in subsidized plans without verification of their eligibility. The goal, the CMS said, is “ensuring consumers are aware of and engaged in their health coverage.”
The CMS said some of the policies included in the final rule are temporary and will be sunset at the end of the 2026 plan year. The agency wants to ensure that the enhanced eligibility checks are working efficiently, according to the announcement.
In addition to the broader changes, the CMS also said it will bar federal subsidy dollars from going toward certain gender-affirming care services, particularly calling “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 also would reinstate language from 2012 that excludes Deferred Action for Childhood Arrivals recipients from enrolling in coverage on the ACA exchanges or in states that offer Basic Health Programs.