CMS Proposes Making ACA Enrollees Prove Eligibility Before They Get Subsidies, Starting With 2028 Coverage

People who buy health insurance through HealthCare.gov and the state marketplaces would have to prove they qualify for federal subsidies before any of that money is paid out, under a proposed rule the Centers for Medicare & Medicaid Services released late Friday, Oct. 23.

Today, when a marketplace can’t confirm something on an application electronically, such as income or immigration status, the enrollee gets a grace period to send documents and keeps receiving premium help in the meantime. The proposal would end that. Help would start only after the information checks out, beginning with coverage for 2028.

The change does not touch open enrollment for 2027 coverage, which begins Nov. 1. But it would reshape how roughly 17 million marketplace customers sign up and renew in the years after that.

“Federal subsidies should only go to eligible Americans, not to fraudsters gaming the system,” CMS Administrator Dr. Mehmet Oz said in the agency’s announcement. Treasury Secretary Scott Bessent said the rules “close eligibility loopholes” so that premium tax credits go only to people who are entitled to them.

What would the proposed rule change?

According to the CMS fact sheet, marketplaces would have to verify four things before paying advance premium tax credits or cost-sharing reductions: household income and family size; status as a citizen, U.S. national or lawfully present immigrant; whether the person is eligible for or enrolled in other qualifying coverage, such as Medicaid or a job-based plan; and where the person lives.

Applicants whose information can’t be confirmed right away could still buy a plan while the review is pending, but they would pay full price until it clears. CMS also proposes a “contingent” plan choice, so people could pick a plan that takes effect only once they’re found eligible for financial help, even if open enrollment has ended by then.

The rule carries out the 2025 budget law, P.L. 119-21, which the administration calls the Working Families Tax Cuts. Treasury proposed matching tax-credit regulations on Oct. 15.

Would current enrollees still be renewed automatically?

Yes, but possibly without their subsidy. Under the proposal, people already enrolled would be automatically re-enrolled with financial help only if they come back to the marketplace each year, confirm their information and have it re-verified. Anyone who doesn’t would be rolled over into the same coverage at full price.

That is a major shift for a program in which many people let their plans renew without logging in. Health policy researchers have long warned that paperwork, not ineligibility, is a common reason people lose coverage.

When would people have to verify their information?

CMS wants every marketplace to open a verification window on Aug. 1 each year, three months before open enrollment. Consumers could use it to send documents early so their subsidy is in place by Jan. 1. The first window would open Aug. 1, 2027, for 2028 plans.

How many people could lose coverage?

CMS’s own analysis, published with the rule, expects enrollment to fall. The agency estimates about 237,500 fewer enrollees each year on HealthCare.gov and 95,000 fewer across the 22 state-run exchanges, or roughly 332,500 in total, starting in 2028. That is measured against a baseline of about 16.9 million people.

Federal spending on advance premium tax credits would drop by about $2.6 billion a year under those estimates. The agency also says younger, healthier customers are the most likely to give up when faced with paperwork, which would leave sicker people in the pool and push average claims costs up about 0.4%. Premiums would rise as a result, the analysis says.

CMS argues that much of the drop would come from enrollments that were improper to begin with, and that verifying income up front could spare some families a surprise bill at tax time, when overpaid subsidies have to be paid back.

Why is CMS doing this now?

Officials have cited fraud by brokers who signed people up for zero-premium plans without their knowledge, a problem that drove years of complaints and enforcement actions. The administration has also been tightening marketplace rules through annual payment notices and the 2025 law.

The proposal comes as coverage is already slipping. A Commonwealth Fund survey released this week found the uninsured rate for working-age adults climbed to 11.2% in 2026, as HNC reported Friday. Rising costs are part of the picture too: workers now pay an average of $7,471 a year toward family coverage at work, according to KFF’s latest employer survey.

What happens next?

The rule is scheduled to appear in the Federal Register on Oct. 27, and the public will have 30 days after that to comment. The full text is already posted on the Federal Register’s public inspection site under file code CMS-9873-P. CMS would then have to finalize it in time for marketplaces to build the new checks before the first August window.

For now, nothing changes for people shopping for 2027 plans next month. Enrollees who want to be ready for 2028 can make sure the income, household and address details on their marketplace account are current and keep recent tax returns and pay stubs on hand.

Key Takeaways

• CMS proposed requiring ACA marketplaces to verify income, family size, immigration status, other coverage and residence before paying subsidies.
• The rule would start with 2028 coverage. Open enrollment for 2027, beginning Nov. 1, is not affected.
• Current enrollees would keep their subsidy at renewal only if they return each year and have their information re-verified.
• CMS estimates about 332,500 fewer marketplace enrollees a year and $2.6 billion less in federal subsidies, with slightly higher premiums.
• A new verification window would open Aug. 1 each year, starting Aug. 1, 2027.

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