Dive Brief:
- The Trump administration proposed a rule on Friday tightening eligibility requirements for Affordable Care Act subsidies, cementing new restrictions passed in the GOP’s “Big Beautiful Bill” last year.
- The changes would require ACA enrollees seeking enhanced tax credits and cost-sharing reductions to verify income, citizenship and residential information before financial assistance kicks in, starting in 2028. Currently, enrollees who appear eligible can receive financial assistance for a brief window before their documentation is verified.
- The CMS said the new policies were meant to stop fraud in the exchanges and estimated that around 332,500 fewer individuals per year would enroll in ACA plans as part of the rule.
Dive Insight:
The second Trump administration has made cracking down on the ACA a priority — freezing registrations for new brokers, cutting more than 700,000 purportedly unauthorized enrollments and enacting stricter eligibility checks for people seeking coverage — all in the name of rooting out what officials say is rampant fraud.
Officials in the Trump administration said Friday’s new policies were “common-sense reforms” meant to safeguard taxpayers dollars.
“Hardworking American taxpayers should not be forced to subsidize health care for people who are ineligible under federal law,” Treasury Secretary Scott Bessent said in a statement.
Currently, individuals qualify for premium tax credits if their household income is between 100% and 400% of the federal poverty level, and for cost-sharing reductions if it’s between 100% and 250%.
People are required to provide qualifying information to the CMS to receive financial assistance, though the agency lets enrollees reap the savings for a period of time before it’s able to verify that information.
The latest regulation would close that loophole. Starting in plan year 2028, the agency would need to verify household income and family size, citizenship status, residency and eligibility for other health coverage before enrollees can receive financial assistance.
It also would require enrollees to verify that information annually to continue receiving financial help. The CMS proposed creating a new verification period, starting Aug. 1 each year before open enrollment begins.
The CMS said its goal is to make sure consumers have enough time to share and confirm their eligibility before the next plan year begins. But overall, the agency estimates more than 237,000 enrollees would leave the federal exchanges each year — plus another 95,000 who would depart state plans — as a result of the rule.
The regulation is part of a swath of changes enacted as part of the GOP’s “Big Beautiful Bill.” The law, signed by President Donald Trump in July 2025, instituted broad cuts to federal health programs like Medicaid and restricted ACA exchange eligibility.
While the Trump administration is overhauling the ACA, enrollees have also faced turmoil after the Republican-led Congress allowed more generous subsidies to expire at the end of last year, causing premiums to skyrocket and pushing millions of Americans off the exchanges.
ACA enrollment has plummeted as a result. About 18% fewer individuals — or more than 4.6 million people — signed up for ACA coverage in June 2026 compared to June 2025.
