CMS proposes holding ACA marketplace subsidies until eligibility is verified, starting with 2028 coverage

The Centers for Medicare & Medicaid Services filed a proposed rule for public inspection at 4:15 p.m. Friday that would bar Affordable Care Act exchanges from paying advance premium tax credits and cost-sharing reductions to applicants until certain eligibility information is verified. The 203-page rule, titled “Patient Protection and Affordable Care Act, Exchange Pre-Eligibility Verification” (CMS-9873-P), is scheduled to publish in the Federal Register on Oct. 27.¹²

The rule says it carries out section 71303 of Public Law 119-21, signed July 4, 2025, which CMS calls the Working Families Tax Cut legislation. Starting in 2028, that law generally bars the premium tax credit for a month unless an exchange has verified the enrollee’s eligibility.²

What it would require

• When an applicant’s household income, family size, citizenship or immigration status, residency, or other health coverage, including employer coverage, cannot be matched to data sources, exchanges could not pay subsidies until the mismatch is resolved. People could still enroll at full price during that period, or “pend” a plan choice that takes effect only once they are found eligible. The rule exempts households that qualify for a special enrollment period for birth, adoption, marriage or certain losses of a dependent.²³
• Enrollees would keep subsidies for the next year only if they, or the person who filed their application, provide or confirm income, family size, citizenship or eligible-noncitizen status, other coverage and residence between Aug. 1 and Dec. 31 of the year before. Those who do not would be re-enrolled without financial help, CMS says.²⁴
• Every exchange would have to offer a “pre-open enrollment verification period” each year from Aug. 1 until open enrollment begins, first on Aug. 1, 2027, for plan year 2028. The rule says consumers would not be required to use it.²
• Most provisions apply starting with plan year 2028.²

The agency’s rationale

“Federal subsidies should only go to eligible Americans, not to fraudsters gaming the system,” CMS Administrator Mehmet Oz said in a news release. Treasury Secretary Scott Bessent said in the same release that the proposal would “close eligibility loopholes.”⁴ The Treasury Department proposed related tax credit regulations Oct. 15.³² In the rule, CMS writes that reading the law to accept applicants’ attestations alone would make the law’s changes “meaningless,” and says checking information before payment would cut off a way some agents and brokers have collected commissions on ineligible enrollees.²

Estimated effects

The rule’s impact analysis estimates:²

• Enrollment: 332,500 fewer people a year starting in 2028, 237,500 on exchanges using the federal platform and 95,000 on state exchanges. CMS says these are eligible people deterred by the added steps; its baseline already assumes fewer improper enrollments.
• Subsidies: a decrease in advance premium tax credit spending of $7.6 billion a year starting in 2028, from fewer enrollees and from people with data mismatches receiving the credit for an average of 1.5 fewer months.
• Premiums: an increase of 0.4%, or $2.89 per member per month, because the agency expects those who leave to be younger and healthier.
• Costs: annualized costs of $240.20 million a year in 2026 dollars at a 7% discount rate over 2026-2030.

The analysis also lists unquantified effects, including possible delays in access to care and “subsequent strain on emergency departments.”²

How to comment

Comments are due 30 days after publication, which would be Nov. 26 if the rule publishes Oct. 27 as scheduled. They can be filed at regulations.gov under docket CMS-2026-3367.²⁴

What the records do not show

• The rule does not quantify how much fraud or improper enrollment it would prevent; it lists less fraudulent enrollment as an unquantified benefit.²
• It keeps current residency and family size checks for now and asks for comment on strengthening them.²
• The agency’s enrollment and spending figures are projections it says could fall outside its estimates.²