Millions of Medicare Recipients to See Lower Health Care Fees Next Year

As we near the midpoint of this year, the federal government is already looking ahead to 2027 and making changes that might impact next year's health insurance coverage for millions of Americans.

Recently, the Centers for Medicare & Medicaid Services (CMS) finalized a rule that alters what people pay for health insurance and how they access coverage during 2027.

Find out more about whether these changes could really help you keep more of your money.

How does the rule impact health insurance in 2027?

The new rule affects several different aspects of health insurance coverage beginning next year. In particular, the rule:

• Reduces user fees with the goal of making health insurance premiums more affordable
• Gives states more power to oversee plans
• Creates stricter standards for eligibility verification

The agency says it hopes the provisions of the new rule boost "consumer choice, affordability, access and protections."

What specifically does the new rule change?

CMS describes the new rule as "sweeping" and says it impacts many areas of health insurance coverage in 2027. Among other things, it:

• Ends the monthly special enrollment period (SEP) for those with household incomes estimated to be at or below 150% of the federal poverty level. CMS says the current policy allows agents and brokers to boost their commissions by improperly enrolling ineligible consumers or helping them to switch plans in ways that violate rules.
• Requires verification of income for those who seek premium subsidies
• Requires eligibility verifications for most enrollments that occur during special enrollment periods
• Cuts advanced premium tax credit payments by $5 a month for enrollees who do not undergo eligibility verification and who are auto-re-enrolled in plans that are fully subsidized.

In addition, the annual open enrollment period is going to be standardized so that it ends on Dec. 31 for all health insurance exchanges. The goal is to keep people enrolled in health insurance throughout the year instead of allowing them to delay enrolling until they need coverage.

How might the changes help taxpayers save money?

CMS estimates that once the rule's changes are implemented, individual health insurance premiums could fall by about 5% on average.

In addition, taxpayers as a whole may save as much as $12 billion in 2026 thanks to several changes, including a crackdown on improper enrollments in Affordable Care Act plans.

In a statement on the CMS website, U.S. Health and Human Services Secretary Robert F. Kennedy Jr. says the rule helps weed out waste, fraud, and abuse.

"With this rule, we're lowering marketplace premiums, expanding coverage for families, and ensuring that illegal aliens do not receive taxpayer-funded health insurance," he says.

How bad is ACA fraud?

A combination of factors has allowed ACA fraud to become widespread, according to CMS.

Less stringent verification policies and an expansion of premium subsidies triggered a wave of fraud that cost taxpayers up to $20 billion in 2024, according to CMS.

The agency says around 5 million people were improperly enrolled in ACA plans during that year.

What do critics say about the new rule?

Not everybody is supportive of the new CMS rule. Critics have suggested that the stricter verification rules might keep some people who truly are eligible for coverage from getting it.

CMS's own analysis estimates that between 725,000 and 1.8 million consumers could lose coverage under the new rule, with losses concentrated in nine states with high rates of improper enrollment.

Others note that even if premiums fall a bit, it won't matter if they are paired with higher out-of-pocket-cost exposure.

Among other things, the new rule increases access to health insurance plans that are cheaper and nontraditional. Such plans often come with much higher deductibles.

Finally, critics worry that the expiration of enhanced ACA subsidies that occurred at the end of 2025 could reduce some of the savings that are part of the new rule.

Reports suggest that an estimated 1.2 million fewer people signed up for coverage via the health insurance exchanges once the enhanced subsidies expired. Critics of the new rule worry that higher out-of-pocket costs could force even more people to abandon health insurance coverage.

In a statement on its website, the Center on Budget and Policy Priorities says the new rule "weakens consumer protections and pushes people towards lower-quality plans that put them at risk of higher out-of-pocket costs."

It goes on to say the following: "At a time when many marketplace enrollees are already struggling with rising health care costs, this new rule will make it even harder for people to afford the health coverage they need."

When do the rule changes impact you?

It is important to remember that the changes associated with the new rule do not impact health insurance coverage in 2026. Instead, these changes kick in with coverage that begins next year.

That means the rule first begins to impact consumers who shop for health insurance coverage during the upcoming open enrollment period that gets underway in the fall.

Bottom line

The new rule impacting health insurance coverage during 2027 could have a big impact on where you stand financially.

Proponents of the rule say it could help many people to save money on health coverage beginning next year. However, critics contend that many others are likely to pay more out of pocket for coverage and care.

As always, the best way to make sure you find affordable coverage is to take matters into your own hands. Start educating yourself now about how the new rule might impact your coverage. That way, you could be ready to make the best choice when open enrollment kicks off this fall.