The Centers for Medicare & Medicaid Services (CMS) proposed 2027 Notice of Benefit and Payment Parameters (NBPP) marks a notable shift in Marketplace policy, expanding lower premium plan options, relaxing certain federal standards, and moving more implementation and oversight responsibility to states and Marketplaces. It also introduces eligibility and verification policies that could significantly affect enrollment, operations, and market stability. 

To unpack what this could mean for plan year 2027 and beyond, Andrea Maresca spoke with Zach Sherman, Managing Director for Coverage Policy and Program Design at Health Management Associates (HMA); Lina Rashid, Principal at HMA; and Michael Cohen, PhD, Principal at Wakely, an HMA company, who, alongside colleagues, published a Policy Brief on state-level and consumer impacts, as well as a Wakely White Paper on the proposed rule. 

 Q: When you zoom out from the technical details, what are the big takeaways from the proposed 2027 NBPP for states, consumers, and issuers? 

Lina Rashid: At a high level, the proposal reallocates risk and responsibility across the system. Consumers may see more lower premium options through expanded catastrophic plan eligibility and more flexible bronze plan design, but often with more cost-sharing, higher deductibles, or greater complexity. For consumers, affordability is about more than just premiums; it’s about how much healthcare costs for individuals and their families overall and the cost of care when they need it. 

States are being given options to take on more oversight and operational responsibility but without additional federal funding. And issuers are being given more flexibility, but it comes with uncertainty regarding enrollment and risk mix. 

Zach Sherman: The rule’s cumulative effect matters more than any one policy. Expanded catastrophic eligibility, higher out-of-pocket exposure, relaxed network standards, and tighter verification requirements all interact. Together, they raise questions about access, affordability, and whether Marketplaces are equipped to manage administrative and enrollment disruption. 

Q: The paper highlights potentially significant enrollment effects. What’s driving that dynamic? 

Michael: Two things stand out. First, the proposal implements statutory changes that remove advance premium tax credit (APTC) eligibility for certain lawfully present immigrants beginning in 2027. CMS estimates more than a million people could lose eligibility, and it’s reasonable to expect most of them will exit the individual market. 

Second, the proposed income verification changes could generate millions of data matching issues (DMIs) that temporarily or permanently cut off access to advance premium tax credits. While CMS projects a relatively modest disenrollment effect, our analysis suggests losses could be meaningfully higher depending on how quickly issues are resolved. We estimate that approximately 4.7 million enrollees could receive DMIs under the proposal, and upward of 80 percent of them could temporarily or permanently lose access to APTCs, putting coverage at risk. 

Zach: If consumers can’t afford the full premiums while resolving a data issue, many will drop coverage. That creates churn and administrative strain that Marketplaces must manage. 

Q: How do these policies affect state Marketplaces and regulators specifically? 

Zach: States are being asked to do more across multiple fronts. Network adequacy oversight is shifting toward states that conduct effective rate review. States may also choose or feel pressure to take on Essential Community Provider (ECP) review authority, including for new non-network plans. Accepting that responsibility requires legal authority, staff capacity, and technical infrastructure. 

At the same time, states may need to stand up the State Exchange Improper Payment Measurement (SEIPM) program, which CMS acknowledges will increase administrative burden. 

The proposed State Exchange Enhanced Direct Enrollment (SBE-EDE) option is also a significant shift. Rather than operating a centralized consumer enrollment platform, Marketplaces would focus on certifying, overseeing, and monitoring multiple third-party entities. As a former director of a state-based Marketplace program, I know this is a fundamentally different operational posture that comes with oversight and compliance costs. 

Q: The proposal also introduces non-network plans. What should stakeholders be watching here? 

Michael: Non-network plans may offer lower premiums, but they change how access works. Provider participation depends on the willingness to accept the plan’s payment as payment in full. On paper a plan may meet access standards, but in practice consumers could face difficulty finding care. That places additional oversight responsibility on states to determine whether access is sufficient in practice. If aggressively priced non-network plans disproportionately attract healthier enrollees, it can create financial risk for issuers and for the broader market. 

Q: What does this mean for market stability going forward? 

Zach: Stability will vary by state. States that invest in oversight, consumer assistance, and operational readiness—often a state-based Marketplace—may be better positioned to manage these changes. Others may see sharper enrollment declines or access issues. That divergence across states is an important signal from this proposal. 

Q: What should states and stakeholders be doing right now? 

Zach: States should be doing scenario planning, assessing which flexibilities to adopt, where to maintain higher standards, and whether they have the capacity to take on expanded responsibilities. These decisions will shape how the rule plays out on the ground. 

Michael: Issuers should be stress testing pricing assumptions, risk adjustment exposure, and operational readiness. All stakeholders should remember that comments on the proposed rule are due March 13, 2026. 

Lina: Notably, CMS is not done with regulatory reforms. The agency solicited comment on medical loss ratio (MLR) policies and paused Essential Health Benefit benchmark updates, as well as issues not covered in this proposed rule, such as revisions to the Section 1332 waiver and Section 1333 interstate compacts. States and issuers should be tracking what may come next, not just what’s in this proposal.

The first quarter of 2026 marked a turning point in federal oversight of pharmacy benefit managers (PBMs), the intermediaries that manage prescription drug benefits for most health plans across the commercial insurance market, Medicare Part D, and other programs. New legislation, agency rulemaking, and enforcement activity collectively signal a new phase of oversight that could materially reshape PBM contracting, compensation, and transparency requirements. 

Most notably, the following developments stand out: 

• The US Department of Labor (DOL) proposed new disclosure requirements for PBMs that serve self-insured Employee Retirement Income Security Act (ERISA) plans. 
• The Consolidated Appropriations Act of 2026 (CAA 26), signed February 3, 2026, establishes comprehensive PBM transparency and contracting requirements in the commercial insurance market and Medicare Part D. 
• The Federal Trade Commission (FTC) finalized a settlement with Express Scripts, Inc. (ESI), requiring significant changes to ESI’s business practices. 

Together, these actions signal a trend toward greater PBM accountability, with implications for plans, pharmacies, manufacturers, and consumers. This article provides a high-level overview of the major recent developments in the PBM reform policy landscape, along with key considerations for stakeholders. 

Medicare Part D: Key Statutory Changes 

Beginning in plan year 2028, CAA 26 makes significant changes for PBMs operating in Medicare Part D. Key provisions include: 

• Requiring PBMs to provide annual reports to plan sponsor clients detailing aggregate and drug-specific costs 
• Restricting PBMs compensation structures, prohibiting payments tied to drug prices, rebates, or price-based benchmarks and limiting PBMs to only receive bona fide service fees that reflect fair market value 
• Stipulating additional parameters related to rebate guarantees, contract terminology, and audit rights 

Additional provisions that will take effect in beginning with plan year 2029 include: 

• A requirement that plan sponsors and PBMs comply with forthcoming standards for “reasonable and relevant” pharmacy contracting terms and conditions 
• Expansion of the enforcement infrastructure to avert potential violations of the program’s pharmacy contracting requirements 

Key considerations: The Centers for Medicare & Medicaid Services (CMS) has broad discretion in implementing these provisions, including setting pharmacy contracting standards, determining which PBM affiliates are subject to new requirements, and defining “fair market value.” PBMs will face expanded reporting and compliance obligations, while plans and other stakeholders will have opportunities to shape implementation through the regulatory process. 

Commercial Health Insurance Market: Key Statutory Changes 

For the commercial market, CAA 26 establishes similar transparency requirements for PBMs that serve fully insured and self-insured plans, with reporting required up to four times per year. Unlike Medicare Part D, the statute does not prohibit pricelinked compensation in the commercial market, but it does require detailed disclosure of PBM fees and revenue streams. For contracts with selfinsured plans, PBMs must remit 100 percent of rebates and fees tied to drug utilization, subject to specified limitations. 

Key considerations: These provisions significantly expand federal oversight in the commercial market. PBMs will need to scale compliance infrastructure, while employers and other plan sponsors may seek enhanced analytical and actuarial support to interpret disclosures and assess PBM performance. 

Medicaid Left Out, For Now. 

Unlike prior legislative packages, CAA 26 does not include Medicaid-specific PBM reforms, such as prohibitions on spread pricing (i.e., a PBM charges a payer more than the amount it pays the dispensing pharmacy for a prescription) and expanded National Average Drug Acquisition Cost (NADAC) reporting. 

Key considerations: These policies continue to have bipartisan support and could reemerge in future legislation. States, PBMs, and managed care plans should continue monitoring for renewed federal action on these policies. 

DOL’s Proposed PBM Fee Disclosure Rule 

DOL’s proposed rule, “Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure,” would require PBMs serving self-insured ERISA plans to disclose information about rebates, manufacturer fees, pharmacy payments, and spread pricing. In late February, DOL extended the public comment period to April 15 to allow stakeholders to address how the proposed rule should align with the newly enacted CAA 26 provisions. 

Key considerations: DOL could withdraw the proposal in favor of the statutory framework or could finalize the rule to take effect before the CAA 26 requirements begin. Either path would further increase near-term compliance for PBMs and plan sponsors, and stakeholders should monitor this space closely. 

FTC Settlement with ESI 

The FTC’s settlement with ESI resolves insulin-focused litigation against the PBM and imposes extensive requirements related to transparency, compensation, rebates and fees, and benefit design. The settlement also includes less common provisions, such as a commitment to reshore and increase disclosures related to ESI’s rebate group purchasing organization (GPO) functions. 

Key considerations: If similar settlements are reached with other PBMs, the FTC could play an expanded role in shaping PBM market behavior, supplementing legislative and regulatory reforms with enforcement-driven standards. 

State Efforts to Regulate PBMs 

States continue to pursue PBM reforms, with dozens of laws enacted in recent years addressing licensure, reporting, pharmacy reimbursement, and contracting standards. Although the Supreme Court’s 2020 decision in Rutledge v. PCMA opened the door to certain state-level reforms, subsequent court decisions have narrowed the scope of permissible state regulation, particularly when ERISA preemption or Medicare Part D conflicts arise. 

Key considerations: Stakeholders operating across multiple markets and states will continue to face a complex and evolving patchwork of requirements, underscoring the importance of ongoing policy tracking and compliance coordination. 

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Recent federal and state actions suggest that PBM reform is entering a more operational phase defined by transparency and enforceable standards governing compensation, contracting, and market behavior. As implementation unfolds, stakeholders across the prescription drug supply chain will need to engage closely with regulators, assess new data flows, and adapt their business practices to a more prescriptive oversight environment. 

For more information about the policies described in this article and the PBM policy landscape more broadly, please contact our experts Conor Sheehey or Stephen Palmer.