This Week
The Developments
Proposed
CMS proposes rules on Part D PBM compensation, MA provider directories and $0 generics for low-income duals
Released Oct 16, 2026; Federal Register publication scheduled Oct 20; comments due Dec 15; proposed start 2028
What changed
CMS released a proposed rule (CMS-4214-P) implementing sections 6219, 6220 and 6224 of the Consolidated Appropriations Act, 2026. Per the Federal Register public-inspection copy and CMS's fact sheet, it would (1) set new requirements for PBMs in Part D covering compensation tied to drug utilization, data reporting to plan sponsors and CMS, price-guarantee transparency and disclosure of certain manufacturer-agreement terms, with disgorgement of funds to CMS for violations; (2) require Medicare Advantage plans to verify provider directories at least every 90 days, report an accuracy score, and limit cost sharing to in-network levels for enrollees who relied on inaccurate listings; and (3) cut the generic-drug copay from $1 to $0 for full-benefit dual-eligible people at or below 100% of the federal poverty level. Proposed start dates are plan or contract year 2028, and the directory accuracy scores would be posted publicly for 2029. CMS did not publish savings estimates in the materials reviewed.
Why it matters
The February 2026 law set the statutory outline for PBM reform in Part D; this proposal is where the operating details, definitions and enforcement tools get written, and those details determine whether PBM compensation actually moves away from drug-price-linked payments. The directory provisions address a long-running access problem, since patients often learn a listed provider is not in network only after seeking care. This is a proposal, not a final rule, and the text may change after comment.
Warrants deeper follow-up. Read the PBM remuneration definitions and the disgorgement mechanism closely; compare with state PBM laws already tracked.
Sources
Background from our research
Storylines
Proposed
IRS proposes premium tax credit rules implementing the 2025 reconciliation law, including removal of the excess-credit repayment cap
Published Oct 15, 2026; comments due Nov 30; hearing Dec 8
What changed
Treasury and the IRS published proposed regulations (REG-101576-26) to implement changes the One Big Beautiful Bill Act (Public Law 119-21) made to the premium tax credit (section 36B). Per the Federal Register text, the proposal would remove the rule making lawfully present immigrants below 100% of the poverty level eligible for the credit, exclude certain plans from qualified health plan treatment (including enrollment through income-based special enrollment periods and, later, Exchanges lacking required pre-enrollment verification), treat people denied Medicaid solely for failing a community-engagement requirement as eligible for other minimum coverage, require Exchange verification for a month to count as a coverage month for tax years after 2027, and eliminate the cap on repayment of excess advance credits. The IRS estimates about 3.7 million returns in 2028 would include an excess advance-credit repayment. Some provisions are proposed to apply to taxable years beginning on or after Oct. 15, 2026 and others to 2027 or 2028.
Why it matters
This is where the 2025 law's marketplace changes become operating rules for taxpayers and Exchanges. The repayment-cap removal shifts income-forecasting risk onto enrollees, and the Medicaid work-requirement provision links marketplace credit eligibility to Medicaid outcomes. The 3.7 million figure is the IRS's own estimate, not an independent one. Applicability dates differ by provision, so check each before assuming a start date. This is a proposal, not final.
Warrants deeper follow-up. Check each provision's applicability date before citing a start date; pair with the KFF enrollment item below.
Sources
Background from our research
Storylines
Report
KFF: individual-market enrollment fell 18% in a year, to about 20.5 million
Published Oct 14, 2026
What changed
A KFF analysis of Mark Farrah Associates data finds individual-market enrollment fell from 25.2 million in June 2025 to 20.5 million in June 2026, an 18% decline. KFF reports effectuated ACA Marketplace enrollment of 19.2 million in mid-2026, down 12% from February, and says Marketplace enrollment fell in every state but New Mexico early in the year. KFF notes the June 2026 level is still about 7 million above June 2019.
Why it matters
It is a measured enrollment figure, not a projection, and it follows the end of enhanced premium tax credits. KFF cautions that the three-month grace period delays terminations, that plan-selection counts can include people who never paid, that June data miss later cancellations, and that post-February Marketplace figures are inferred from individual-market totals. The data show how many people left, not why or whether they became uninsured.
Sources
Background from our research
Storylines
Report
KFF: about three in four Medicare Advantage enrollees had a condition that could lead to a Medigap denial
Published Oct 13, 2026 (2023 data)
What changed
KFF estimates that 74% of Medicare Advantage enrollees (about 20.9 million) in 2023 had a pre-existing condition that could lead to a Medigap denial if they switched to Original Medicare outside a protected period. The share rises with age, to 88% for those 85 and older. Only Connecticut, Maine, Massachusetts and New York require insurers to offer Medigap to all people 65 and older regardless of health history. KFF used 2023 Medicare data and applications from the six largest carriers in a few states.
Why it matters
It quantifies how hard it can be to leave Medicare Advantage after enrolling, which matters during open enrollment (Oct. 15 to Dec. 7) and for anyone whose plan is exiting. KFF flags limits: one data year, a non-exhaustive condition list (so 74% may undercount), applications from three states, and no adjustment for state protections. These are potential denials, not observed ones.
Sources
Background from our research
Storylines
Litigation
Alignment Healthcare sues HHS over how CMS built the 2027 Medicare Advantage Star Ratings
Filed Oct 9, 2026; reported Oct 14
What changed
Alignment Healthcare filed suit in the U.S. District Court for the District of Columbia (No. 1:26-cv-03550, per the Georgetown litigation tracker) on Oct. 9, a day after CMS released the 2027 Star Ratings. It argues CMS used ten measures without adopting them by regulation and set methodology through technical notes rather than notice-and-comment rulemaking, in violation of the Medicare statute and the Administrative Procedure Act. It seeks vacatur of the 2027 ratings and a recalculation. Per Healthcare Dive, Alignment says the ratings will cost it more than $200 million in 2028 payments, and that the share of its members in plans rated four or more stars fell from 98% to 25%. Healthcare Dive reports CMS denied Alignment's pre-release request on Oct. 7 and did not respond to a comment request.
Why it matters
Star Ratings drive quality bonus payments to plans and steer enrollment. This case challenges the process by which the ratings are set, not whether they measure quality. The dollar impact and membership shares are Alignment's own claims; the suit is one party's allegations, and no ruling has been reported.
Warrants deeper follow-up. Track for a ruling or schedule; an adverse ruling for CMS could affect how ratings feed 2028 bonus payments across the market.
Sources
Background from our research
Storylines
Administrative action
HHS Secretary delegates provider-exclusion investigation authority to the CMS Administrator
Federal Register Oct 14, 2026; effective immediately
What changed
A Federal Register notice (statement of delegation of authority) shows HHS Secretary Robert F. Kennedy Jr. delegating to the CMS Administrator the Secretary's permissive-exclusion authority under section 1128(b) of the Social Security Act, effective immediately, and ratifying prior actions taken under it. Hearings and rulemaking are not delegated, and the notice says it does not change the existing delegation to the HHS Inspector General. The notice says CMS requested the delegation and is well placed to develop the evidentiary basis for exclusions as the administrator of Medicare and Medicaid, and that consolidating the work should reduce redundancy.
Why it matters
Exclusion from federal health programs is a major program-integrity tool, so a second agency that can build the case changes who can start one. The notice states a program-integrity rationale; it does not say how many exclusions are expected or how CMS and the Inspector General will coordinate, and no results are reported yet. This is an administrative delegation, not legislation.
Warrants deeper follow-up. Watch for CMS exclusion actions and how CMS and the HHS Inspector General coordinate.
Sources
Background from our research