The CMS proposed a sweeping rule Monday making a number of changes to Affordable Care Act plans, including expanding the availability of catastrophic coverage.
The proposal would allow more enrollees to choose catastrophic plans — which have low monthly premiums but high deductibles — for longer terms.
Additionally, the regulation would repeal requirements that insurers on the federal exchange offer standardized plan designs, crack down on potentially abusive marketing practices by health plan brokers and require more income verification checks during special enrollment periods.
“We are cracking down on improper and misleading practices while giving states and health plans more room to innovate and compete,” CMS Administrator Dr. Mehmet Oz said in a statement.
The proposal comes amid greater turmoil on the ACA exchanges, after more generous financial assistance for marketplace plans expired at the end 2025. Almost 23 million people signed up for ACA coverage this year, down from last year’s record high as premiums increased, pushing more enrollees to drop their coverage.
Public comments on the proposed rule are due by March 11.
Plan requirements and catastrophic plans
The regulation would make several changes to required health plan designs, as well as expand the availability of catastrophic coverage.
Catastrophic plans cover essential benefits at a lower monthly cost, but come with high cost-sharing. For 2026, the annual deductible for covered services under a catastrophic plan is $10,600 for an individual or $21,200 for a family, according to health policy research firm KFF.
Catastrophic plans are largely limited to enrollees under age 30, or older people who meet certain hardship or affordability exceptions.
The proposal would allow individuals 30 years of age and older who are ineligible for premium tax credits or cost-sharing reduction payments to qualify for a hardship exemption, according to a fact sheet on the rule.
The rule would also allow insurers to offer catastrophic plans with multiple year terms, up to 10 years.
The changes would allow more people to enroll in affordable catastrophic coverage, the CMS said.
Additionally, the proposed rule would repeal a requirement that insurers offer standardized plan designs to customers on the federal exchanges and in states that use the federal sign-up platform, which set common cost-sharing across the bronze, silver, gold and platinum plan categories to help consumers easily shop for coverage. It would also remove the limit on the number of non-standard plans insurers could offer.
The change should cut back on regulatory complexity and allow for innovation plan design, the CMS said.
The regulation would also allow non-network plans — or coverage that doesn't rely on a contracted set of providers with specific terms and negotiated payment rates — to become a qualified health plan on the exchanges if they can ensure access to a range of providers.
Special enrollment period updates
Under the proposal, the CMS would continue to prohibit insurance exchanges from offering special enrollment periods for people with income below 150% of the federal poverty line after the 2026 payment year.
The change should reduce opportunities for unauthorized enrollments or plan switching, the CMS said.
Additionally, the regulator is once again introducing pre-enrollment eligibility checks for at least 75% of new beneficiaries through special enrollment periods. The policy was included in a regulation finalized last summer, but the change was stayed in court.
The policies come as Republican lawmakers have raised concerns about fraud on the ACA exchanges, which contributed to the party’s decision to allow enhanced premium tax credits to lapse at the end of the year.
Marketing restrictions
The proposal would also prohibit a number of marketing practices by insurance agents and brokers that the CMS said leads to fraud and improper enrollments.
Some of the banned practices include providing cash and monetary rebates to push consumers to enroll, falsely claiming that beneficiaries would qualify for zero-dollar premiums or insurance, and miscommunicating enrollment deadlines, according to the CMS.
The rule would also require agents and brokers to use a standardized form approved by the HHS to review enrollees’ eligibility documentation, and clarify what actions beneficiaries should take to confirm their eligibility.
The changes should protect consumers from incorrect eligibility determinations and from being enrolled in coverage that doesn’t fit their needs, the CMS said.
State oversight and exchange flexibility
The CMS also proposed adopting a program next year that would measure improper premium tax credit payments administered by state-run exchanges.
The agency said it currently has a process in place for exchanges managed by the federal government, and a similar program for state marketplaces would promote “consistency and parity in program integrity efforts nationwide.”
Additionally, the proposed rule aims to make it easier for states to transition from federally operated exchanges to their own marketplaces. The regulation would remove the requirement that a state use the federal platform for one year before fully transitioning to their own marketplace.
