WASHINGTON, D.C. — A dramatic series of reforms proposed by the Centers for Medicare & Medicaid Services (CMS) aims to address mounting concerns over improper enrollments in Affordable Care Act (ACA) Health Insurance Marketplaces and enhance the integrity of taxpayer-funded programs. Unveiled on March 10, the 2025 Marketplace Integrity and Affordability Proposed Rule is designed to safeguard Americans from fraudulent enrollment practices and ensure subsidized coverage reaches those who genuinely qualify.
The Rise of Fraudulent Enrollments
Over the last few years, improper enrollments within ACA Marketplaces have surged to alarming levels. Following an increase in financial assistance in 2021 and the removal of some eligibility verification guidelines, applications with data mismatches skyrocketed—from 2.6 million in 2020 to a staggering 6.3 million by 2022. CMS estimates that in 2024 alone, up to 5 million people were fraudulently enrolled in subsidized health coverage, costing taxpayers up to $20 billion.
CMS Administrator Chiquita Brooks-LaSure emphasized the urgent need to reform. “This is a problem we cannot ignore,” she said. “The integrity of healthcare access depends on ensuring that subsidies go to the people who need them most, and who qualify under the law.”
A System Under Reform
At the core of CMS’s proposals is the elimination of regulatory loopholes and a tightening of eligibility verifications. Among the key policy changes, CMS has proposed an end to the monthly special enrollment period for those earning below 150% of the federal poverty level, a measure some critics say has undermined continuous coverage and risk pool stability. By reinstating pre-enrollment checks, the agency seeks to prevent individuals from waiting to enroll only when they get sick.
Other provisions focus on streamlining auto-enrollment protocols. Marketplaces would be required to reduce subsidies by $5 per month if the enrollee fails to verify their eligibility, creating a nominal financial link to encourage proactive verification. Additionally, the annual Open Enrollment Period would shorten, requiring individuals to secure coverage by December 15 each year.
Notably, CMS also announced a proposal to revert to a prior regulatory definition of “lawfully present,” which would exclude DACA recipients from participation in ACA Marketplace plans. This reflects the Trump administration’s broader stance on immigration reform and fiscal responsibility.
“These changes are designed to stabilize health insurance markets, improve affordability, and maintain trust between taxpayers and the government,” CMS stated in its release.
Expanding Oversight Amid Tumultuous Changes
Another significant aspect of the rule clarifies CMS’s dedication to fraud reduction. Enhanced oversight will extend to insurance brokers, agents, and health plan issuers to ensure compliance with transparency and eligibility standards. The proposal also seeks to restrict coverage for certain procedures, such as sex-trait modifications, from the essential health benefit category, beginning in 2026.
Collectively, CMS predicts that the proposed changes could reduce federal spending on premium tax credits by $11 billion to $14 billion by 2027, benefitting middle-class families and U.S. taxpayers alike.
Shifting ACA Model Portfolios
The CMS Innovation Center is also undergoing an overhaul. On March 12, the center announced plans to terminate several time-limited experimental healthcare models, including the Maryland Total Cost of Care and ESRD Treatment Choices programs. Ending these models early is projected to save nearly $750 million by December 2025.
While some critics believe discontinuing these models contradicts efforts to improve care, CMS defended the move as necessary to focus on more effective strategies. “Primary care remains a foundational component of our strategy, but this evolution ensures we’re meeting our statutory obligations efficiently,” CMS emphasized.
Drug Pricing Reform Gains Traction
The week also marked progress in the Medicare Drug Price Negotiation Program. CMS signed agreements with manufacturers of 15 high-cost drugs for its second cycle of negotiations. This builds upon advancements in transparency and affordability, with negotiated prices for covered drugs expected by 2027.
Participating drugs include big names like Ozempic, Breo Ellipta, and Vraylar, among others. CMS plans to host roundtables and town hall events to gather patient input while facilitating active discussions with manufacturers. These efforts are aimed at reducing drug costs while preserving access to critical therapies.
A Crucial Moment for Policy Reform
The proposed reforms highlight an administration leaning toward enforcing accountability within federally funded healthcare programs. Supporters argue the changes are essential to stemming financial waste and protecting taxpayers, while critics question the impact on vulnerable populations, especially those affected by rollbacks on eligibility expansions.
Nevertheless, the future of healthcare reform under the Trump administration is likely to remain a hot-button issue. With billions in savings projected and millions of lives potentially impacted, CMS’s proposals could define the next decade of healthcare policy.
As the rollout continues, public feedback, collaboration with stakeholders, and legislative clarity will determine the outcomes and effectiveness of these sweeping reforms. CMS, for its part, insists its strategic vision gives Americans both affordability and peace of mind. Only time will reveal the true effects on the nation’s health system.
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