CMS Proposes Cutting Off ACA Subsidies Until Income And Residency Are Verified, Starting 2028
Unverified consumers could still enroll but would get no financial help under the proposed rule, which targets plan year 2028.
The Centers for Medicare & Medicaid Services (CMS) on Friday proposed a rule that would make ACA Exchanges verify household income, citizenship or immigration status, other coverage and residence before paying any premium subsidies. Consumers whose information cannot be confirmed could still buy a plan, but without financial assistance while checks are pending.
Verify first, subsidize later
Today, an Exchange that cannot confirm an applicant's information electronically sends the person into an inconsistency period, when they must submit documents. During that time the Exchange pays advance premium tax credits and cost-sharing reductions, together called financial assistance, to people who otherwise appear eligible. If documents never arrive, the help is generally reduced or ended.
The proposal would end that practice. Exchanges would verify household income and family size, status as a citizen, U.S. national or eligible noncitizen, eligibility for or enrollment in other qualifying coverage, and place of residence before providing help.
Currently enrolled consumers would be automatically re-enrolled with assistance only if they return each year and have their information re-verified. Those who do not would be re-enrolled without it. CMS also proposes that Exchanges maintain or reduce assistance during an inconsistency period after an enrollee voluntarily reports a change in circumstances.
CMS said the rule would reduce improper or fraudulent enrollments and could lower the risk that consumers must repay excess credits at tax time because of inaccurate income estimates.
A pre-enrollment window opens August 1, 2027
The provisions would take effect with eligibility determinations for plan year 2028. Exchanges would have to open a verification period each August 1, ahead of open enrollment, so consumers can submit information early. The first window would start August 1, 2027, for 2028 coverage.
Consumers could also pick a contingent plan that takes effect only once they are found eligible for assistance, even after open enrollment or a special enrollment period has ended. For people already enrolled, CMS proposes paying assistance retroactively for the months of the inconsistency period once eligibility is verified.
CMS would waive the new checks for certain family-size changes, such as a birth, adoption, marriage, or loss of a dependent through divorce, separation or death where the Exchange allows it. In those cases assistance would rest on the consumer's attested application information.
States moving to a State-based Exchange would apply 15 months before starting operations for the pre-enrollment verification period, rather than 15 months before open enrollment.
Tied to the tax law, open for comment
CMS said the rule aligns Exchange requirements with changes to premium tax credit eligibility in the Working Families Tax Cuts legislation (P.L. 119-21). It said the Treasury Department proposed related regulations on October 15, 2026.
The rule is posted on the Federal Register's public inspection site under document 2026-21891. Comments can be submitted for 30 days after publication. CMS also asks for input on data sources to verify family size and residency, and on ways to add safeguards while limiting burdens on consumers and on state and federal Exchanges.
The 30-day comment clock starts when the proposal is published in the Federal Register.
Sources
- Exchange Pre-Eligibility Verification Proposed Rule (CMS 9873-P) — Centers for Medicare & Medicaid Services
- Shopping for an ACA plan this year? Here's what you need to know. - CBS News — CBS News
- Five major companies pledge faster, electronic prior authorizations | Healthcare Dive — healthcaredive.com
- Department of Health and Human Services and the Justice Department’s Civil Division Announce Anti-Fraud Healthcare Self-Disclosure Pilot Program | HHS.gov — hhs.gov
- What We Know about Trump’s $500 ACA Checks and the User Fees Funding Them | KFF — kff.org
- TUFTS MEDICINE AND BLUE CROSS BLUE SHIELD OF MASSACHUSETTS ANNOUNCE COLLABORATION TO EXPAND ACCESS TO CARE AND STREAMLINE PRIOR AUTHORIZATION — prnewswire.com
