The Centers for Medicare and Medicaid Services (CMS) issued regulations on May 15 designed to lower health care costs, crack down on fraud, and grant states more control over the Affordable Care Act Exchanges for fiscal year 2027.

“American taxpayers deserve to know their dollars are going only to people who truly qualify,” said Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz in a statement.

“This rule strengthens eligibility checks, cracks down on abuse, and gives insurers more flexibility to offer affordable, consumer-focused coverage options.”

A Paragon Institute study estimated 5 million people may have been improperly enrolled in the Affordable Care Act in 2024 alone, costing taxpayers as much as $20 billion.

Improper enrollments, enabled by weakened verification processes and expanded premium subsidies, have triggered widespread fraud, according to a 2025 federal government statement.

Here are the key provisions of the new rules.

Stricter Verification

To ensure federal subsidies go only to those who qualify, the rule introduces stricter verification processes.

The rule reinstates pre-enrollment verification for special enrollment periods—such as when someone loses their existing health insurance through a job change.

Proof of eligibility will be required for at least 75 percent of new enrollments through those periods.

The rule does not require proof of eligibility in 100 percent of cases because, while the goal is to stop bad actors, the government also wants to avoid creating too many barriers for people who need insurance.

That’s according to the State Health and Value Strategies Program of Princeton University.

Consumers must provide additional documentation if their reported income is less than 100 percent of the federal poverty level or if tax data is unavailable.

The federal poverty level for 2026 is $15,960 for one person or $27,320 for a family of three.

Beginning in fiscal year 2028, health insurance agents will have to use standardized forms to document consumer consent and application reviews to prevent unauthorized enrollments.

The rule explicitly prohibits deceptive marketing, such as offering cash rewards for enrolling or falsely promising “$0 premiums.”

Lowering Fees

The rule reduces the fees that insurance companies pay to operate on the federal platform. These savings are intended to put downward pressure on monthly premiums for consumers.

The fees will drop from 2.5 percent to 1.9 percent of monthly premiums.

State user fees—charged when a state manages its own marketplace using the federal website and IT systems—will drop from 2.0 percent to 1.5 percent of monthly premiums.

The risk adjustment fee will decrease to $0.18 per member per month.

Risk adjustment fees are used to balance the financial risk among insurance companies by moving funds from plans that have healthier members to plans that have members with high medical needs.

More Plan Types

The rule removes restrictions that made it harder for insurance companies to innovate and offer different types of plans.

For example, the rule removes the requirement that insurers offer standardized plans, and it lifts the limit on how many non-standardized plans they can offer.

Starting in fiscal year 2028, a new type of non-network plan can be offered.

These plans don’t use a specific list of doctors that consumers must choose from; instead, they set fixed benefit amounts that consumers can use at any provider.

Consumers will also have greater access to low-cost catastrophic plans, which will be allowed to have terms lasting up to 10 consecutive years.

Empowering States

The new rule restores authority to state governments to manage their own insurance markets based on local needs.

States will be able to conduct their own review of doctor networks and essential community providers rather than relying on federal reviews.

This provision also simplifies the process for states that want to manage their own exchange—running their own website, call center, and IT systems—without having to go through a mandatory transition year on the federal platform.

Benefit Changes

Starting in 2027, routine adult dental services will not be classified as essential health benefits, which better aligns with typical employer-sponsored plans, according to the Centers for Medicare and Medicaid Services.

Starting in fiscal year 2028, states requiring insurers to cover benefits beyond the federal minimums will be required to pay those costs directly rather than passing them on to consumers or the federal government.

Lawrence Wilson contributed to this report.