Oh yeah...Musk/Trump CMS plans to reverse Biden-era ACA rules, throw DACA & transgender folks under the bus, more

This was actually announced a few weeks ago, but I was knee-deep in my Congressional District-level Enrollment Breakout Pie Chart project so I didn't get around to posting about it until now.

Via the Musk/Trump Admin's Centers for Medicare & Medicaid Services (CMS):

Today, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule to address the troubling amount of improper enrollments impacting Affordable Care Act (ACA) Health Insurance Marketplaces across the country. CMS’ 2025 Marketplace Integrity and Affordability Proposed Rule includes proposals that take critical and necessary steps to protect people from being enrolled in Marketplace coverage without their knowledge or consent, promote stable and affordable health insurance markets, and ensure taxpayer dollars fund financial assistance only for the people the ACA set out to support.

It's important to note from the outset that the issue of people being enrolled in ACA plans (or switched from their existing plan to another) by unscrupulous insurance agents/brokers is a real one which I've written about several times before; some of the actions being taken by the Musk/Trump Admin to address this issue are actually reasonable. HOWEVER, others appear to have nothing to do with this issue and are likely using it as an excuse to make enrolling in ACA plans more cumbersome for no legitimate purpose...and still others are simply cruelty for the sake of cruelty, which is unsurprising from this administration but still anger-inducing.

In any event, here's what the proposed changes include (shout-out to my friend & colleague Louise Norris for the assist on some of these):

• Ending the availability of the monthly special enrollment period (SEP) for individuals with household incomes below 150% of the federal poverty level (FPL) — a policy that currently allows people to wait to enroll until they become sick instead of promoting continuous enrollment that fosters prevention and better health outcomes.

I have mixed feelings about this one. The primary reason why ACA enrollment is mostly limited to a specific Open Enrollment Period (OEP) in the first place is to help prevent people from gaming the system--that is, waiting until they're sick or injured before signing up for health insurance coverage. The justification from the Biden Administration for allowing those who earn less than 150% FPL (around $22,600/yr for a single adult this year) to enroll year-round is that thanks to the upgraded subsidies under ARPA/IRA, enrollees who earn less than 150% FPL are eligible for $0-premium Silver ACA plans anyway.

In other words, the risk of someone waiting until they're sick/injured to enroll in health insurance is a lot lower if there's no reason for them not to wait--that is, if they don't have to pay a dime in net premiums anyway, they're a lot more likely to sign up while they're healthy. This means the insurance carriers receive monthly revenue and prevents the type of "adverse selection" you'd otherwise see.

HOWEVER, there's two problems with this: First, it relies on the ARPA/IRA subsidies being in place...and as of this writing, it's extremely unlikely that those will be extended past the end of 2025. If Republicans allow them to expire on 12/31/25, ACA subsidies will revert back to their pre-ARPA formula, in which even those who earn less than 150% FPL would still have to pay at least ~1.8% of their annual income for the ACA benchmark Silver policy.

In that scenario, some enrollees would still likely qualify for $0-premium ACA plans (Bronze for the most part), but that wouldn't be guaranteed...and the temptation to game the system would be much higher, especially since the unsubsidized premiums would also skyrocket for enrollees.

The other problem (which exists even with the upgraded subsidies in place) is the one CMS is using as the cornerstone of this change: If the enrollee doesn't have to pay anything (not even a penny), it makes it a lot easier for them to be enrolled in a policy or switched to a different one without the actual enrollee ever knowing that it happened until months or even years later. Since they're paying nothing themselves, they'll never receive a premium invoice from the insurance carrier and thus may only find out much later when they do visit the doctor/hospital and get confused about a policy they didn't realize they were enrolled in.

• Strengthening verifications by requiring all Marketplaces to reinstitute pre-enrollment verifications of eligibility for SEPs and require further verifications of income when there is no tax data available for verification.

For the past few years, the federal ACA exchange (HealthCare.Gov) has only required those who enroll during the off-season (ie, outside of OEP) to provide proof of their eligibility if the reason for a Special Enrollment Period is that they've lost another type of healthcare coverage; otherwise they were pretty much taken at their word (although it's still a federal crime to knowingly lie about your eligibility for a SEP).

Musk/Trump's CMS is cracking down on this by requiring verification (uploading a copy of a marriage certificate, for instance) regardless of the reason.

According to Norris, they also want the state-based ACA exchanges (which 20 states now utilize) to mandate verification for at least 75% of SEP enrollees as well.

In addition, they want to crack down on enrollees who may earn too little to be eligible for premium subsidies (ie, less than 100% FPL) but who claim that they earn over 100% FPL in order to qualify.

This is truly an example of rubbing poor Americans faces in shit, since just about the only reason anyone would be in that situation in the first place is if they're caught in the "Medicaid Gap" due to their state refusing to expand Medicaid under the ACA--but technically it is indeed a violation of ACA rules for someone to receive APTC assistance if they earn less than 100% FPL.

By a similar token, assuming the improved IRA subsidies expire at the end of 2025, those who earn more than 400% FPL would also become ineligible for ATPC subsidies.

They're also proposing to require other forms of income verification before they're eligible to enroll if the IRS isn't able to provide it for whatever reason. Of course, Elon Musk's DOGE TechBros are also gutting the IRS, so I'm guessing that's gonna become more and more common as well. Oh yeah...and they're shortening the time period for SEP applicants to provide such verification by 60 days.

• To protect against consumers being enrolled without their knowledge and consent, the rule proposes that when an enrollee does not proactively verify their ongoing eligibility for a fully subsidized plan, Marketplaces must continue to re-enroll that individual into the same plan, but must also reduce the amount of advance payment of the premium tax credit by $5. This will require the enrollee to take an active step and pay a nominal $5 monthly premium until they confirm or update their eligibility determination, ensuring they are aware of their enrollment in this coverage.

Hoo boy. This one may be outright illegal. Normally, if an existing ACA enrollee takes no action whatsoever (ie, they never contact their ACA exchange by phone or by logging into their account) during OEP, the exchange will either automatically re-enroll them into their existing plan for another year or they'll "map" the enrollee to the closest equivalent plan in the event that their current one is being discontinued by the insurance carrier.

This rule, if implemented, states that in cases where the enrollee is fully subsidized (ie, 100% of their premiums are covered by APTC subsidies), they'd have those subsidies reduced by $5/month...which means they'd go from paying nothing to $5/month in premiums.

While 2025 OEP data isn't available yet, during the 2024 OEP, 42% of federal exchange enrollees (6.8 million people) were enrolled in $0-premium policies. Assuming that extrapolated across every state and as similar this year, that'd be up to 10.2 million ACA exchange enrollees who could potentially be hit with a $5/month hike in their monthly premium, or up to $612 million/year in lost tax credits. They'd be charged the $5/mo until they actively confirmed that they wanted to remain enrolled in that policy or that their income had changed.

On the surface, there's a reasonable-sounding justification for this change: That $5/mo premium would guarantee that the enrollee would know that they had been re-enrolled in the new plan, since they'd receive an invoice for $5/mo from the carrier.

HOWEVER, even setting aside the possibility that this would be illegal (which doesn't seem to stop the Musk/Trump Admin from anything else they're doing), it doesn't even pass the smell test as a fraud reduction measure--CMS could make it $1/mo instead of $5, since the point is supposedly to make certain the enrollee is aware of their enrollment status, not the amount itself.

Of course, if the upgraded IRA subsidies are allowed to expire at the end of this year, a lot fewer people will be enrolled in ACA exchange plans to begin with, and a lot fewer of those who do enroll will have $0/mo premiums which would trigger the $5/mo rule (in 2021, only 14% of HC.gov enrollees had $0 net premiums...the subsidy upgrade was made retroactive to the beginning of the year but wasn't in place during the 2021 OEP itself).

In other words, this is a troubling (and possibly illegal) solution to a legitimate problem.

• In addition, to ensure consumers maintain continuous coverage into the new year, the rule proposes to shorten the annual Open Enrollment Period for individual market coverage offered through the ACA Marketplaces by ending it on December 15.

The official ACA Open Enrollment Period has ranged from as long as 6 months during the first OEP to as short as 45 days during the first Trump Administration. During the Biden Administration it was lengthened back out to 76 days (Nov. 1st - Jan. 15th), with an initial enrollment deadline of December 15th for coverage starting January 1st.

However, around half of the 20 state-based ACA exchanges have chosen to offer longer OEPs, with a few states like California, New York and DC extending them as long as 3 months.

While the vast majority (around 95%) of OEP enrollees typically sign up by the December 15th deadline, there are still hundreds of thousands who sign up after that. Just as importantly, by making December 15th the final deadline, it means that millions of people who allowed themselves to be passively auto-renewed into an existing policy won't have the opportunity to change their minds--once that deadline passes. They'd be locked into whatever plan they were signed up for for the next 12 months whether it still makes sense for their healthcare situation or not.

This proposed rule also makes important strides in carrying out Administration priorities.

• CMS proposes a policy that would add sex-trait modification to the list of items and services that may not be covered as essential health benefits beginning in plan year 2026.

In other words, they're throwing transgender folks under the bus, which is hardly surprising but is still appalling; I'll have a separate writeup about this soon. It doesn't mean that insurance carriers can't cover gender-affirming services; it just means that those services can't have APTC subsidies applied towards them if they're included in the policy.

• To advance President Trump’s EO on Ending Taxpayer Subsidization of Open Borders, the proposed rule would also revert to a previous definition of “lawfully present” that excludes Deferred Action for Childhood Arrivals (DACA) recipients for purposes of enrolling in Marketplace coverage. Returning to this previous definition, in effect from 2010 to 2024, would ensure that taxpayer dollars to subsidize ACA coverage go only to lawfully present consumers who are eligible to enroll in subsidized coverage through the Marketplaces.

Again, hardly surprising but still disgusting. The writing has been on the wall about this since November 5th. 100,000 or so DACA recipients got their hopes up under the Biden Administration only to have those hopes crash down around them under the Musk/Trump Administration.

There's some additional proposed changes which aren't mentioned in the main press release but which show up in the accompanying details:

Satisfying Debt for Past-Due Premiums

CMS proposes to allow issuers to require payment of past-due premiums before effectuating new coverage, which would adopt a policy similar to one initially established under the 2017 Market Stabilization Rule and later reversed in the 2023 Payment Notice. To the extent permitted by state law, this would permit an issuer to establish terms of coverage that add past-due premium amounts owed to the issuer to the initial premium the enrollee must pay to effectuate new coverage. This change is expected to reduce adverse selection and encourage continuous coverage, potentially leading to more stable premiums and fostering a more stable insurance market.

This one isn't actually unreasonable (at least on the face of it, of course).

Eliminating Gross Premium Percentage-Based and Fixed-Dollar Premium Payment Thresholds

CMS proposes to eliminate the fixed-dollar and gross percentage-based premium payment thresholds, allowing issuers to only adopt the net percentage-based threshold. This change is intended to enhance program integrity by ensuring enrollees pay at least some of the premium owed, reducing the risk of improper enrollments. This proposed policy would mitigate the risk that consumers are enrolled in coverage improperly or without their knowledge and increase transparency and accountability in premium payments, helping to prevent unintended financial obligations for consumers.

I'm not familiar enough with the details of this one to comment either way, really.

Addressing Failure to File and Reconcile

CMS proposes to reinstate its 2015 policy requiring Exchanges to determine an individual ineligible for APTC if they (or their tax filer) failed to file their federal income tax and reconcile APTC for one year, instead of for two consecutive tax years as implemented in the 2024 Payment Notice. Under this proposed change, the Marketplace must determine a tax filer ineligible for APTC if (1) CMS notifies the Marketplace that the tax filer or someone in their household received APTC for a prior year for which tax data would be utilized for verification of income and (2) the tax filer or someone in their household did not comply with the requirement to file a tax return and reconcile APTC for that year. This change aims to minimize improper enrollments and protect consumers from accumulating tax liabilities.

I have mixed feelings about this one.

Removing Re-enrollment Hierarchy Standards

CMS proposes to remove the provision of current regulations that allows Marketplaces to automatically re-enroll CSR-eligible enrollees from a bronze to a silver QHP if the silver QHP is in the same product, has the same provider network, and has a lower or equivalent net premium as the bronze plan into which the enrollee would otherwise have been re-enrolled. This proposal benefits consumers by respecting consumer choice and reducing confusion caused by changing a consumer’s plan from bronze to silver, even when their existing bronze plan remains available. The proposed changes also decrease the likelihood of unexpected tax liabilities related to re-enrolling bronze enrollees into a silver plan without their knowledge.

This one is a crock of shit. It was one of the better tweaks made by the Biden Administration, and it's a damned shame to see it reversed.

As noted above, normally the exchange will re-enroll people into the same policy if it's still available, but a couple years back the Biden Admin realized that there's a lot of people who are leaving thousands of dollars in potential savings on the table by selecting Bronze plans instead of a high-CSR Silver plan with the exact same provider network even when they're eligible for a far better value without paying a dime more.

To benefit enrollees, HealthCare.gov started shifting people in that specific situation over to Silver plans instead in order to provide them with greater savings on deductibles, co-pays & coinsurance fees. The Musk/Trump Administration is pulling the plug on this change.

Updating Premium Adjustment Percentage (PAPI) Methodology

CMS proposes to update the methodology for calculating the premium adjustment percentage to establish a premium growth measure that captures premium changes, in both the individual and employer-sponsored insurance (ESI) markets, for the 2026 plan year and beyond. CMS also proposes the plan year 2026 maximum annual limitation on cost sharing, reduced maximum annual limitations on cost sharing, and required contribution percentage using the proposed premium adjustment percentage methodology. This proposed policy would ensure these annual adjustments to ACA parameters align more closely with the changes in premium trends they aim to track.

Maximum out of Pocket (MOOP) is the maximum amount that any ACA plan enrollee has to pay in deductibles, co-pays or coinsurance combined for in-network care over the course of the year.

While the fact sheet doesn't specify the exact amounts involved, according to Norris:

• 2025 Maximum Out of Pocket cap: $9,200 for an individual or $18,400 for the household
• Under current rules: 2026 MOOP would be $10,150 / $20,300 (10.3% higher)
• Proposed rule: 2026 MOOP would be $10,600 / $21,200 (15.2% higher)

Don't get me wrong: The 10.3% MOOP hike for 2026 is bad enough, but jacking it up by 15.2% will be even worse.

Simplifying De Minimis Thresholds

CMS proposes to widen the de minimis ranges to +2/-4 percentage points for all individual and small group market plans subject to the actuarial value (AV) requirements under the EHB package, other than for expanded bronze plans, for which CMS proposes a de minimis range of +5/-4 percentage points. CMS also proposes removing from the conditions of QHP certification the de minimis range of +2/0 percentage points for individual market silver QHPs and specifying a de minimis range of +1/-1 percentage points for income-based silver CSR plan variations. This proposed policy would allow for greater flexibility in plan design, providing consumers with increased plan options and potentially lower premiums as issuers adjust plan designs to attract a broader range of enrollees, improving market competition and stability.

(sigh) This is basically blurring the lines between Bronze, Silver, Gold and Platinum-level ACA plans, making the distinctions vaguer and more confusing to enrollees.

Establishing Evidentiary Standard for Termination of Agent, Broker, and Web-Broker Marketplace Agreements for Cause

CMS proposes to adopt in regulation a “preponderance of the evidence” standard of proof with respect to issues of fact for HHS to assess whether an agent, broker, or web-broker’s Marketplace Agreements should be terminated due to noncompliance and to add a definition of “preponderance of the evidence.” This proposed change would improve transparency in the process for holding agents, brokers, and web-brokers accountable for compliance with applicable law, regulatory requirements, and their Marketplace Agreements and protect consumers from the impacts of potential noncompliance, including improper enrollments.

Honestly not sure whether this one will make the "rogue agent/broker/web broker" situation better or worse.