Medicare agency proposes annual pre-enrollment eligibility verification for health exchanges

The Centers for Medicare & Medicaid Services proposed on 27 October 2026 to rewrite how the Affordable Care Act health insurance exchanges verify eligibility, adding a mandatory pre-open-enrollment verification window and barring advance premium subsidies while a consumer’s data matching issue is unresolved. The proposal, filed as CMS–9873–P under RIN 0938–AW03, is published in the Federal Register of 27 October 2026 (Vol. 91, No. 206, Proposed Rules, p. 67656) and carries a 30-day comment period closing on 27 November 2026.

What the proposal would change

The draft amends 45 CFR Part 155 to conform exchange eligibility and verification practice with section 71303 of Public Law 119–21 of 4 July 2025, the Working Families Tax Cut legislation. That provision adds section 36B(c)(5)(A) of the Internal Revenue Code, effective for tax years beginning after 31 December 2027, and provides that from 1 January 2028 a month generally is not a coverage month unless an exchange has verified the enrollee’s eligibility to enroll in a qualified health plan and, where relevant, for the advance premium tax credit.

CMS states it is reading the statutory term “verify” as the existing verification procedures under section 1411 of the Affordable Care Act and its implementing regulations, and therefore builds on current data-matching machinery rather than replacing it.

No subsidies while a data matching issue stands

The rule would amend § 155.315(f)(4)(ii) so that exchanges cannot authorize advance premium tax credits or cost-sharing reductions for applicants with data matching issues in any of the following categories until the exchange adjudicates them:

• citizenship and lawful presence status under § 155.315(c);
• residency under § 155.315(d);
• minimum essential coverage other than through an employer under § 155.320(b);
• annual household income, family size and eligible noncitizen status under § 155.320(c)(3);
• employer-sponsored coverage under § 155.320(d).

The restriction would not apply where the applicant’s tax household qualifies for a special enrollment period described in § 155.420(d)(2)(i) or (ii). A new § 155.315(f)(4)(iii) would also set rules for enrollees who report a change after the exchange has already verified the same criteria.

An August verification window before open enrollment

New § 155.410(h) would require every exchange to operate a pre-open-enrollment verification period beginning 1 August each year and ending when its open enrollment begins, starting with 1 August 2027 for plan year 2028. During that window consumers could provide, at minimum, household income, citizenship or lawful presence status, incarceration status and place of residence. Under proposed changes to § 155.335, an enrollee could not be redetermined eligible for the following plan year unless income, family size, citizenship or eligible noncitizen status, other minimum essential coverage and residence were provided or confirmed on or after 1 August and no later than 31 December of the preceding year.

A new § 155.400(i) would let applicants “pend” a plan selection so that it reaches the issuer only after eligibility for subsidies is determined. New effective-date rules in § 155.410(f)(5) and § 155.420(b)(6) would key coverage to the 15th of the month: resolution by the 15th yields first-of-month coverage, later resolution the first of the following month.

Cost and coverage estimates

CMS estimates the changes would reduce enrollment by 332,500 people a year — 237,500 on exchanges on the federal platform and 95,000 on state exchanges — and cut advance premium tax credit spending by $7.6 billion annually from plan year 2028, including $2.6 billion attributable to the enrollment decline alone and the remainder to withholding subsidies during inconsistency periods. It projects 1,749,325 additional data matching issues on the federal platform, a $72.6 million annual consumer paperwork burden, a 0.4 percent premium increase, and one-time implementation costs of $1.5 million and $32.7 million for the federal platform and the 22 state exchanges respectively on the pre-enrollment window alone.

Mehmet Oz, Administrator of CMS, approved the document on 13 October 2026.

Why it matters

For the roughly 16.6 million people who hold subsidized exchange coverage, the rule would end automatic re-enrollment on prior data and require an annual confirmation of income, household size, immigration status and residence, with subsidies paused whenever an inconsistency is open. For state exchanges and the agents and web-brokers who handled 76 percent of enrollments in plan year 2026, it means rebuilding application flows, notices and call-centre capacity around an August-to-December calendar.

Source: Federal Register, Vol. 91, No. 206, 27 October 2026, Proposed Rules, p. 67656 (official reference: CMS–9873–P).