Overview of The Centers for Medicare and Medicaid Services (CMS)
The Centers for Medicare and Medicaid Services (CMS) is a federal agency within the U.S. Department of Health and Human Services (HHS). It plays a crucial role in administering the nation’s major healthcare programs. One of its primary responsibilities since the introduction of the Affordable Care Act (ACA) is overseeing the Health Insurance Marketplaces, which connect consumers to affordable health coverage options.
Role of CMS in the ACA Marketplace
- Marketplace Management: CMS plays a crucial role in establishing and overseeing health insurance marketplaces under the ACA, allowing individuals and small businesses to easily compare and purchase insurance plans.
- Consumer protection: CMS ensures that qualified health plans adhere to specific standards. This includes the requirement to cover essential health benefits and to prohibit discrimination against individuals with pre-existing conditions. Furthermore, CMS actively monitors compliance and oversees these standards to guarantee their consistent application.
- Enrollment and Coverage Effects: CMS’s policy changes can significantly influence the affordability and accessibility of health insurance. For instance, alterations in premium costs and subsidy eligibility may lead to decreased enrollment, potentially pushing some consumers away from the ACA marketplaces.
Key Changes Announced on June 20, 2025
On June 20, 2025, the Centers for Medicare & Medicaid Services (CMS) released the “Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability Final Rule,” which establishes standards for Health Insurance Marketplaces that link millions of consumers to Affordable Care Act (ACA) coverage. This rule introduces additional protections to prevent improper enrollments and changes to health care coverage, while also setting standards to maintain the integrity of the ACA Exchanges.
These policy updates are particularly relevant as significant losses in health insurance coverage are anticipated if the enhanced premium tax credits for ACA marketplace coverage are not renewed after 2025. The end of these enhanced tax credits is expected to significantly raise out-of-pocket premiums, likely resulting in millions of individuals losing their coverage.
The policies outlined in the final rule aim to stabilize the risk pool, reduce premiums, and minimize improper enrollments, all with the objective of enhancing healthcare affordability and access while ensuring fiscal responsibility.
The Modifications to the ACA Marketplace
CMS is implementing changes to the Open Enrollment Period (OEP) for the 2027 plan year, which will affect both on- and off- ACA Marketplace coverage. The new proposed rule aim to conclude the open enrollment period a month earlier, setting the new deadline on December 31, with a maximum duration of nine calendar weeks. This change may impact individuals’ ability to enroll in ACA health coverage, as they will have less time to make decisions regarding their healthcare options. This adjustment is designed to minimize consumer confusion, synchronize with employer-based health plan enrollment dates, promote continuous coverage, and mitigate the risk of adverse selection by discouraging delayed enrollment until health care services are needed.
Under the proposed rule and legislation, individuals who are part of the Deferred Action for Childhood Arrivals (DACA) program will be excluded from accessing ACA Marketplace coverage. This exclusion arises from a redefinition of “lawfully present,” which omits DACA recipients. Furthermore, the legislation includes specific provisions that prevent these individuals from qualifying for tax credits, thereby limiting their financial assistance options when seeking health insurance.
CMS is moving forward with the removal of the automatic 60-day extension that was previously available for resolving income inconsistencies within the mandated 90-day period. This change mandates that ACA enrollees must verify their income within the original 90-day timeframe established by law, thereby reducing the chances of individuals with unverified incomes receiving Advance Premium Tax Credits (APTC) premiums throughout the entire verification period. By enforcing timely income verification, this policy aims to enhance the integrity of the enrollment process and ensure that assistance is provided only to those who meet the necessary eligibility criteria.
Further modifications to ACA Marketplace scheduled to occur in 2026
CMS is moving forward with reinstating a policy that requires Exchanges to declare individuals’ ineligible for APTC if they or their tax filer have not filed federal income taxes and reconciled APTC for one year, rather than the previously implemented two-year requirement. This policy aims to reduce improper ACA enrollments and safeguard consumers from incurring significant tax liabilities, with the provision set to expire at the end of 2026.
The proposed regulation stipulates that individuals who are automatically re-enrolled in an ACA Marketplace coverage and have a $0 premium (after accounting for tax credits) will incur a $5 monthly charge if they do not actively verify their eligibility for a fully subsidized plan. This measure aims to encourage proactive engagement from ACA enrollees, as the legislation also describes this fee as a reduction in advance payment of premium tax credits.
Resources
“2025 Marketplace Integrity and Affordability Final Rule | CMS.” Cms.gov, 17 Jan. 2025, www.cms.gov/newsroom/fact-sheets/2025-marketplace-integrity-and-affordability-final-rule.
Hut, Nick. “CMS Finalizes the Program Integrity Rule for the Affordable Care Act Insurance Marketplaces.” HFMA, 21 June 2025, www.hfma.org/payment-reimbursement-and-managed-care/cms-finalizes-the-program-integrity-rule-for-the-affordable-care-act-insurance-marketplaces/. Accessed 15 July 2025.