The Centers for Medicare & Medicaid Services (CMS) has approved a wide-ranging rule for the Affordable Care Act (ACA) Exchanges in 2027, cutting user fees and tightening eligibility checks on the federal insurance marketplace while giving states more room to oversee plans.
Known as the "Notice of Benefit and Payment Parameters for 2027; Basic Health Program," the rule is aimed at keeping federal subsidies focused on eligible enrollees, putting modest downward pressure on premiums and reshaping how states and insurers manage ACA coverage.
The move comes as benchmark "silver" plans sold through Healthcare.gov are projected to rise by an average of 30% for 2026, the sharpest annual increase since 2018 and one that will affect about 17 million people buying ACA insurance through the federal platform.
ACA enrollment has more than doubled since 2020 to 24 million, and a 10-year extension of enhanced subsidies is estimated to carry a federal price tag of about $350 billion, underscoring the stakes for CMS as it recalibrates marketplace rules.
"American taxpayers deserve to know their dollars are going only to people who truly qualify," CMS Administrator Dr Mehmet Oz said. The rule, he said, "strengthens eligibility checks, cracks down on abuse, and gives insurers more flexibility to offer affordable, consumer-focused coverage options."
Pre-enrollment verification will return for Special Enrollment Periods, and some applicants will face new income documentation requirements. Eligibility for advance payments of the premium tax credit will be aligned with the Working Families Tax Cut legislation, closing off some pathways for ineligible applicants to access ACA subsidies.
Read more: US insurers face 30% Obamacare premium surge
Regulators are also tightening oversight of the distribution side of the insurance market. Agents and brokers will see clearer prohibitions on certain marketing practices and standardized documentation for consumer consent and eligibility reviews, as CMS looks to curb questionable enrollment tactics without cutting off access to assistance.
Plan design will shift as well. Issuers using HealthCare.gov will no longer be required to offer standardized Qualified Health Plan options, and caps on non-standardized plans will be removed, with a new certification track opened for plans that do not use a provider network.
Insurers will be able to offer catastrophic coverage with terms of up to 10 consecutive plan years, supported by broader hardship exemptions and more flexibility in cost-sharing for bronze and catastrophic products.
On state authority, the rule allows Federally-facilitated Exchange states that meet federal standards to run their own provider network and Essential Community Provider reviews, with CMS support if needed.
The transition period for moving from a Federally-facilitated Exchange to a State-based Exchange is being dropped, simplifying the shift for states that want greater control over their ACA insurance markets.
From 2028, states will have to pay for any benefits they mandate beyond the federal Essential Health Benefits package, even if those are not part of the state's benchmark plan.
CMS will also bar issuers from treating routine non-pediatric dental services as an Essential Health Benefit, and will demand more detailed rate filings showing how carriers account for unreimbursed cost-sharing reductions.
User fees on the Exchanges will fall to 1.9% for the Federally-facilitated Exchange and 1.5% for State-based Exchanges on the federal platform, from 2.5% and 2.0% in 2026.
CMS expects that change, combined with the other adjustments, to filter through to ACA premiums and the broader insurance market in 2027.
