CMS Marketplace Rule’s Sunset Provisions Could Help Congress Find Budget Reconciliation Savings

Copy link to quick take

In an effort to reduce federal spending in the ACA Marketplaces, both the recent Centers for Medicare & Medicaid Services (CMS) rule and the House-passed version of the proposed One Big Beautiful Bill Act (OBBB) include provisions tightening eligibility rules and restricting access to federal subsidies. While the two sets of policies overlap significantly, only the CMS rule has been finalized so far. However, several provisions in the rule are designed to sunset after one year, potentially shifting how much the rule versus legislation may impact federal spending.

Key Provisions Included in Both the CMS Rule and the OBBB:

• Stricter Eligibility Verification: Requires more intensive verification of eligibility before individuals enroll in a health plan and receive federal subsidies. The Congressional Budget Office (CBO) estimates this could reduce the deficit by $37 billion through 2034.
• Special Enrollment Period Restrictions: Eliminates the income-based special enrollment period (SEP), which previously permitted individuals with incomes below 150% of the federal poverty level (FPL) to enroll in coverage outside of an open enrollment period, and requires additional eligibility verification for other, non-income based SEPs. The CBO estimates that ending premium tax credits paid to this SEP population will reduce the deficit by $40 billion through 2034.
• Other Cost-Saving Measures: Includes shortening the open enrollment period, revising methodology to calculate the premium adjustment percentage (the measure of year-over-year private insurance premium growth used to index out-of-pocket limits and gauge the affordability of employer coverage to determine subsidy eligibility), ending automatic reenrollment in certain cases, and excluding DACA recipients and other lawfully present immigrants from exchange subsidies. The CBO has estimated that enacting these provisions as described in the One Big Beautiful Bill will account for an additional $101 billion in projected deficit reduction through 2034.

Timing and Budgetary Impact:

A CMS rule, once finalized, is generally intended to exist permanently or until it is repealed. However, this rule takes effect at the beginning of 2026 and many of its provisions, including those concerning SEP eligibility and income verification requirements, are temporary and designed to sunset at the end of the 2026 calendar year.

This temporary implementation may preserve the potential for the reconciliation bill to generate official savings through changes to ACA marketplaces in later years (2027–2034) if enacted. With parts of the rule expiring at the end of 2026, CBO may credit the legislation – assuming it codifies elements of the rule into federal law – with budgetary savings in future years.