The Centers for Medicare & Medicaid Services (CMS) has introduced a set of proposed rules for 2027 targeting cost reduction, improved competition and stricter oversight of the Federal and State-Based Health Insurance Exchanges.

The draft regulations aim to address fraudulent activity among agents and brokers, reinforce responsible use of subsidies, and encourage health plan designs that help keep premiums in check.

Under the proposal, insurers could offer catastrophic coverage lasting from one to ten years.

The CMS also suggests removing standardised plan design requirements, allowing insurers more freedom to adapt plans to consumer needs.

Health and Human Services Secretary Robert F. Kennedy, Jr. said: “At President Trump’s direction, HHS [Health and Human Services] is driving down costs and rooting out fraud across our health insurance programmes.

“This proposed rule lowers premiums, expands consumer choice, cracks down on fraud, and promotes innovative coverage that prioritises prevention and long-term health.”

Other notable changes include making it possible for plans with lower deductibles but higher out-of-pocket maximums to be offered; aligning incentives between catastrophic and metal-level plans; and broadening hardship exemptions for catastrophic plan eligibility to individuals aged 30 and above in all states.

The agency also proposes allowing non-network plans that demonstrate adequate provider choice to qualify as Qualified Health Plans.

Stronger eligibility checks and income verification processes are included in the proposal.

According to the CMS, these steps would help ensure subsidies only go to eligible applicants and reduce unauthorised enrolment or improper plan switching.

The rules would require exchanges to verify immigration eligibility for premium tax credits and related benefits.

The proposal includes clearer definitions of prohibited marketing conduct for insurance intermediaries, as well as more robust oversight to deter fraud and protect consumers.

Additional measures focus on the financial side of essential health benefits, aiming to prevent federal subsidies from funding state-mandated benefits that could add costs.

Public comments on the proposed rule are open until 11 March 2026.

CMS administrator Mehmet Oz commented: “This proposal puts patients, taxpayers, and states first by lowering costs and reinforcing accountability for taxpayer dollars.

“We are cracking down on improper and misleading practices while giving states and health plans more room to innovate and compete. The goal is simple: lower costs, more choice and Exchanges that work as intended.”

Last month, President Donald Trump advanced a healthcare bill aimed at reducing prescription drug prices and insurance premiums.

According to a White House face sheet, the Great Healthcare Plan would move towards international drug pricing models and increased price transparency.