The Centers for Medicare & Medicaid Services (CMS) on Friday finalized a rule it said will save taxpayers up to $12 billion in 2026 by combatting a “surge of improper enrollments” in the Affordable Care Act (ACA) exchanges and wasteful federal spending. Among the changes: the rule repeals the monthly special enrollment period for low-income individuals and excludes coverage for “dreamers,” people brought to the U.S. as children without immigration paperwork.
In 2024, under the previous administration, the agency boasted a record number of enrollments in the ACA Marketplace. The increase in enrollees was attributed in part to enhanced Marketplace subsidies that make coverage more affordable and increased marketing, outreach, and enrollment assistance. In 2025, CMS said that it surpassed the previous record with 24 million people enrolled in coverage during the open enrollment period.
The 2025 Marketplace Integrity and Affordability Final Rule targets “widespread fraud” and improper ACA enrollments that CMS blames on weakened verification processes and expanded premium subsidies. The agency pointed to research conducted by the conservative think tank group, Paragon Health Institute, that estimated in 2024 five million people may have been improperly enrolled in ACA plans, costing taxpayers as much as $20 billion.
“We are strengthening health insurance markets for American families and protecting taxpayer dollars from waste, fraud, and abuse,” said U.S. Health and Human Services (HHS)Secretary Robert F. Kennedy, Jr., in the final rule announcement. “With this rule, we’re lowering Marketplace premiums, expanding coverage for families, and ensuring that illegal aliens do not receive taxpayer-funded health insurance.”
CMS said several of the policies are temporary measures to immediately tamp down on improper enrollments and the improper flow of federal funds. These policies will expire at the end of the 2026 plan year. The agency said this approach will help to ensure that eligibility verification processes work efficiently and allow qualified enrollees to access ACA Exchange coverage without fear of coverage gaps or surprise tax liabilities resulting from the improper actions of third parties.
CMS Administrator Dr. Mehmet Oz said the final rule will ensure coverage is available to those who truly need it. “This is about putting patients first, stopping exploitation of the system, and realigning the program with the values of personal responsibility and fiscal discipline,” he said.
The agency said that the final rule will:
- Lower individual health insurance premiums by approximately 5 percent on average.
- Repeals the monthly special enrollment period (SEP) for individuals with projected household incomes at or below 150 percent of the federal poverty level, a policy CMS claims was used by some agents and brokers to improperly enroll ineligible consumers and perform unauthorized plan switching to gain commissions.
- Requires income verifications to ensure people qualify for the premium subsidies they receive.
- Conduct eligibility verifications for the majority of enrollments through SEPs, closing loopholes 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.
- Reduces advanced payments of the premium tax credit (APTC) by $5 a month for individuals who are auto-reenrolled in fully subsidized plans without eligibility verification, a move CMS said will ensure consumers are aware of and engaged in their health coverage.
- Standardizes the Annual Open Enrollment Period starting with the 2027 plan year so that it ends by December 31 for all health insurance exchanges, a move meant to encourage people to maintain year-round health coverage rather than waiting until they get sick to enroll, which CMS said will help keep insurance affordable for everyone.
- 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.
- Reinstates HHS’ 2012 interpretation of “lawfully present” to exclude Deferred Action for Childhood Arrivals (DACA) recipients (commonly referred to as dreamers) 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.
- Adopts a “preponderance of the evidence” standard of proof for HHS to assess whether an agent, broker, or web-broker’s marketplace agreement should be terminated due to noncompliance with applicable HHS rules and the terms of their marketplace agreements.