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The Centers for Medicare & Medicaid Services (CMS) has announced it is in the final stages of implementing a new rule that it says will “lower individual health insurance premiums” by 5 percent on average.

CMS said the move is expected to save American taxpayers up to $12 billion in 2026, by “combating the surge of improper enrollments in the Affordable Care Act (ACA) Exchanges.”

Concern has been raised by some that these new measures will push many Americans off their health coverage.

“They will indeed save government money, but only by throwing off the ACA rolls millions of individuals who deserve to be on,” Jonathan Gruber, a professor of economics at Massachusetts Institute of Technology, told Newsweek.

Newsweek has contacted CMS via email for comment.

Why It Matters

According to a CMS release, the new rules are being brought in to tackle “waste, fraud and abuse” in health insurance markets—an issue that is at the forefront of the Trump administration’s policies.

A Government Accountability Office (GAO) report from 2024 found that $100 billion was discovered in “improper payments” in 2023 across the Medicare and Medicaid programs.

While wasteful spending in health insurance markets has been targeted by the administration to lower the tax burden for Americans, critics are concerned that sweeping cuts and changes will only push many off health coverage, subsequently driving up costs in the long-term.

File photo: a Department of Health and Human Services form proposed for use to apply for low-cost insurance from Medicaid or the Children’s Health Insurance Program. File photo: a Department of Health and Human Services form proposed for use to apply for low-cost insurance from Medicaid or the Children’s Health Insurance Program. J. David Ake/AP

What To Know

The new regulation, known as the 2025 Marketplace Integrity and Affordability Final Rule, will target “improper enrollments” in the Affordable Care Act (ACA) Exchanges via a number of measures.

It would repeal the monthly special enrollment period (SEP) for individuals with household incomes at or below 150 percent of the federal poverty level, which CMS called was a kind of loophole for unauthorized enrollments.

The policy has been “used by some agents and brokers to improperly enroll ineligible consumers and perform unauthorized plan switching to gain commissions,” CMS said.

Income verification will now be required for most new and auto-renewed enrollments receiving premium subsidies to “ensure people qualify for the premium subsidies they receive,” CMS added.

There will also be additional eligibility requirements for the majority of enrollments through SEPs, in order to close “loopholes that allowed people to wait to enroll until they needed care,” CMS said.

In addition, the rule will reduce advanced payments of the premium tax credit (APTC) by $5 a month for auto-renewed plans without eligibility verification.

Most of these policy changes are temporary and will expire after the 2026 plan year—they are simply being used as measures to “immediately tamp down on improper enrollments and the improper flow of federal funds,” according to CMS.

Experts have warned about the impact these measures could have on Americans, with Timothy S. Jost, a professor of law at Washington and Lee University telling Newsweek, “as many as 1.8 million people could lose ACA coverage.”

“This is an addition to the 4.2 million who will lose coverage because the Congress is not extending the enhanced premium tax credits that were adopted during the Biden administration,” he added.

Additional actions being made by CMS in regard to ACA Exchanges include a move to ensure federal ACA subsidies will no longer be available “to help cover the cost of specified sex-trait modification procedures to align an individual’s physical appearance or body with an asserted identity that differs from the individual’s sex.”

What People Are Saying

Jonathan Gruber, a professor of economics at Massachusetts Institute of Technology, told Newsweek: “This is classic doublespeak. These actions will throw millions of people off the ACA rolls by setting up arbitrary administrative barriers that make it hard to enroll.”

He added: “There is undoubtably fraud in ACA exchange enrollment. But this is a blunt solution that will remove many deserving enrollees for every undeserving enrollee and lead to hardship for millions.”

Timothy S. Jost, a professor of law at Washington and Lee University, told Newsweek: “The rules that have just been published will dramatically reduce enrollment in the health insurance exchanges by creating barriers to enrollment leaving many people uninsured. The rules are likely to increase premiums rather than reduce them because the added bureaucratic barriers to enrollment will discourage healthy individuals from enrolling and those covered will be much sicker and more costly. To the extent that rules do reduce premiums for some, it will be primarily because the policies they will be buying will be of lower value, with higher deductibles and co-payments and because the premium tax credits they receive will be reduced.”

He added: “The rule may reduce government expenditures, but simply because it reduces the number of Americans covered and the value of their coverage. There has been some fraud by brokers in the federal marketplace but this was already being addressed by excluding fraudulent brokers.”

Robert F. Kennedy Jr., U.S. Health and Human Services Secretary, said: “We are strengthening health insurance markets for American families and protecting taxpayer dollars from waste, fraud, and abuse. With this rule, we’re lowering marketplace premiums, expanding coverage for families, and ensuring that illegal aliens do not receive taxpayer-funded health insurance.”

Dr. Mehmet Oz, CMS Administrator, said: “CMS is restoring integrity to ACA Exchanges by cracking down on fraud, protecting American taxpayer dollars, and ensuring coverage is there for those who truly need it. This is about putting patients first, stopping exploitation of the system, and realigning the program with the values of personal responsibility and fiscal discipline.”

What Happens Next

The finalized policies will apply to plan years 2025 and 2026, after which they are set to expire.