CMS posts Proposed NBPP 2027. Be afraid; be very afraid. (Part 2)

 

IMPORTANT: You have until March 13th to SUBMIT A PUBLIC COMMENT to CMS about any of the proposed changes listed below!

It may not make any difference but believe it or not sometimes it does, even under the Trump regime...and in fact in some cases they're actively stating that they're seeking comment as opposed to just ramming the proposed changes through.

The Patient Protection & Affordable Care Act includes a long list of codified instructions about what's required under the law. However, like any major piece of legislation, many of the specific details are left up to the agency responsible for implementing the law.

While the PPACA is itself a lengthy document, it would have to be several times longer yet in order to cover every conceivable detail involved in operating the ACA exchanges, Medicaid expansion and so forth. The major provisions of the ACA fall under the Department of Health & Human Services (HHS), and within that, the Centers for Medicare & Medicaid (CMS).

The HHS Dept. is currently run by RFK Jr., an anti-vaxxer nutjob who just today stated--and this is a verbatim quote:

"I'm not scared of a germ. I used to snort cocaine off of toilet seats."

The CMS, meanwhile, is currently run by modern day snake oil salesman Dr. Mehmet Oz, who doesn't know what Cost Sharing Reduction subsidies are.

With this as prologue:

Every year, CMS issues a long, wonky document called the Notice of Benefit & Payment Parameters (NBPP) for the Affordable Care Act. This is basically a list of proposed changes to some of the specifics of how the ACA is actually implemented for the upcoming year. Some of the changes are minor tweaks; some are major. Some are fairly simple to understand; some get extremely technical & wonky.

The proposed 2027 NBPP was just released by CMS. The full official document is 577 pages long..over 200,000 words total. For comparison, the first volume of the Lord of the Rings trilogy, The Fellowship of the Ring, runs around 187,000 words. Thankfully, even under the Trump Regime, CMS does at least provide a summary of the main provisions, so let's take a look.

The summary includes descriptions (using language to put a positive spin on all of them, of course) of 34 different policy areas. In cases where they get into areas which I'm not knowledgable enough about to comment on, I'll just note that and provide CMS's phrasing as is, or I'll lean on folks more knowledgable about that area than I am (I'll especially be cribbing heavily on Katie Keith, (Director of Health Policy & the Law Initiative at the O'Neill Institute for National & Global Health Law at Georgetown University Law Center) and Matthew Fiedler (Joseph A. Pechman Senior Fellow in Economic Studies at the Brookings Institution) from their even wonkier explainers at Health Affairs (part 1, part 2, part 3).

I should note that while there's a lot of ugly changes below, not every policy change being proposed by the Trump regime is necessarily negative. In some cases they may be genuinely good ideas; in others they're good ideas originally proposed under the Biden Administration which are being implemented now; in still others they may mostly be positive but could have some negative provisions buried within them.

With that in mind, here's Part Two (see Part One here)...

13. Prohibit Issuers from Including Routine Non-Pediatric Dental Services as an EHB

CMS proposes to prohibit issuers from including routine non-pediatric (adult) dental services as an EHB.

...14. Cost Defrayal of State-Mandated Benefits

CMS proposes revisions to states’ responsibilities when mandating benefits beyond the federally required EHB package. Beginning with plan year (PY) 2027, CMS proposes that any state-required benefit would be considered “in addition to EHB”—and thus not EHB—if it is required by state action after December 31, 2011, applies to the small group and/or individual markets, is specific to required care, treatment, or services, and is not mandated for compliance with federal requirements. Under this proposed policy, states would be required to defray the cost of these additional benefits for enrollees in QHPs offered through the Exchange, regardless of whether the benefit is embedded in the state’s EHB-benchmark plan.

EHBs = Essential Health Benefits. Under the ACA, all qualifying health plans (QHPs) sold on an ACA exchange have to cover at least 10 Essential Health Benefits, including at a minimum things like hospitalization, surgery, prenatal/maternity care, prescription drugs, and so on. States are allowed to require additional EHBs as well, but if they do so they have to defray the cost (so that federal tax credits aren't footing the bill for any of the additional services), but there were ways around this, including adopting another state's EHB package in addition to their own. As Keith & Fiedler explain:

Alaska, for instance, used this process to add or expand coverage of hearing aids and chiropractic care, among other benefits. And South Dakota added coverage of applied behavioral analysis therapy for the treatment of autism spectrum disorder. In these 11 states, opioid-related treatment was the most common benefit that states added through the EHB-benchmark plan process.

The Trump regime is proposing to make it more difficult for states to avoid having to defray the costs of these additional benefits, making it far less likely that insurance carriers will include them in future years.

In addition, Trump's HHS is reversing the Biden-era rule allowing adult dental services to be considered an EHB, limiting mandatory dental coverage (ie, covered by federal tax credits for those eligible) to children only instead.

15. Fixed-Dollar and Gross Percentage-Based Premium Payment Thresholds

To decrease the risk that consumers are improperly enrolled in coverage, CMS seeks comment on whether CMS should temporarily or permanently rescind the option for issuers to implement a fixed-dollar and/or gross percentage-based premium payment threshold for PY 2027 and beyond. CMS also seeks comments on whether State Exchanges should have the flexibility to adopt one or both thresholds, even if they remain unavailable for Exchanges on the Federal platform.

The ACA officially requires enrollees to pay their full premium in order to have their coverage effectuated. Insurance carriers are allowed to let them get away with paying slightly less than 100% of their net premiums without the enrollee automatically losing coverage or entering a grace period. Historically this was a certain percentage (say, 95%, for instance, meaning that as long as they pay $95 out of a $100 net premium in a given month, they'd still get to keep their coverage).

The fact that this is based on the net premium after federal tax credits, however, sometimes causes weird situations: Let's say the gross premium is $400 but the enrollee is eligible for $395 in subsidies. This means their net premium is only $5, but if they only pay $4 of that, they've only hit 80% of their net responsibility instead of 95%.

The Biden Administration allowed insurance carriers the option of making the minimum threshold 98% of the gross premium or they could make the non-payment threshold a fixed dollar amount of up to $10.

The Trump regime has already temporarily eliminated these additional options for 2026...and is asking for comments as to whether they should eliminate them permanently or not. Why anyone outside of the administration would want to do so, I have no idea...but it's a good thing that they're at least asking instead of just proposing to do so, I guess.

16. Extending the Removal of the 150 percent FPL Special Enrollment Period (SEP) Beyond PY 2026

To align Exchange regulations with section 71304 of the WFTC legislation, CMS proposes to amend the regulations such that Exchanges would continue to be prohibited from offering the 150 percent FPL SEP after PY 2026.

There are several reasons why the ACA has a limited-time Open Enrollment Period (OEP) for people to enroll in exchange policies. Part of this is to ensure that the insurance carriers have enough data to work with when they're figuring out how to price and structure policies for the following year. Part of this is because putting a hard deadline out there is a good way of ensuring that the vast bulk of the target market actually goes ahead and signs up.

The main reason, however, is to avoid adverse selection. There's a reason why you can't get a mortgage on a house until you prove that you already have homeowner's insurance, and you can't legally drive a car without a minimum level of auto insurance. This is to prevent people from waiting until after their house catches on fire or they get into a car crash before buying insurance and making a claim.

With health insurance it's a slightly different situation--you already have your body, and you can't swap it out for a different one. Since the ACA requires insurance carriers to sell policies to people regardless of their medical history or condition, the major way insurers have of preventing people from waiting until after they're diagnosed with cancer (for instance) before enrolling in a policy is to limit the time window during which they can do so.

This is actually standard practice for employer-based insurance as well as Medicare, in fact, where there's typically a limited time window (usually 6-7 weeks, I believe) each year during which you're allowed to make changes to your coverage, to prevent people from gaming the system. It's sort of a form of Russian Roulette, in a way, but it makes sense from an actuarial standpoint.

There are exceptions to the Open Enrollment Period, of course: Special Enrollment Periods (SEPs) are limited-time periods (usually 60 days) outside of OEP during which you're allowed to either enroll in an ACA policy or switch to a different one. To qualify for an SEP, you typically have to have a Qualifying Life Event (QLE) such as getting married/divorced; turing 26 & having to enroll in your own policy; giving birth/adopting a child; moving outside of your coverage area; or losing your existing healthcare coverage (i.e., losing employer coverage, Medicaid eligibility, etc).

Basically, these are major life events, the assumption of which is that you didn't go through all that trouble just to deliberately try and take advantage of the insurance carrier.

However, there are also a few other types of SEPs...one of which was put into place by the Biden Administration back in 2021 which amounted to allowing Americans who earn less than 150% of the Federal Poverty Level (FPL) the ability to enroll year round without any other QLE being required.

This is a pretty big deal for a couple of reasons...including the fact that nearly 50% of all ACA enrollees typically earn less than 150% FPL.

Why did the Biden Administration do this? Because of the enhanced federal tax credits which were also put into place by President Biden & Congressional Democrats in 2021. The enhanced subsidies included making the benchmark Silver plan cost nothing in premiums for enrollees below 150% FPL.

Since anyone earning that little could get an ACA exchange plan for $0/month, there was no point in limiting them to the standard OEP, since there was literally no reason for them to try and "game the system" when they wouldn't be paying anything anyway!

Well, the Trump regime temporarily killed the < 150% FPL SEP last summer...and with the enhanced tax credits expiring anyway, they're proposing to kill it permanently. This is basically pouring salt in the wound.

I honestly have mixed feelings about this one. From a strict actuarial POV I understand the logic: No $0 plans*, no year-round enrollment; but to me, the obvious "solution" to this "problem" would be to make the enhanced tax credits permanent rather than removing the ability to enroll year-round now that the enhanced credits have expired.

*(As an aside, thanks to Silver Loading and Premium Alignment, some people are still eligible for $0 premium plans even without the enhanced subsidies in place, although a lot fewer than before.)

17. Pre-Enrollment SEP Verification

CMS proposes to re-introduce the pre-enrollment SEP verification requirement for Exchanges on the Federal platform, which was finalized in the 2025 Marketplace Integrity and Affordability final rule (90 FR 27074) and then stayed by the court in City of Columbus et. al. v. Kennedy et. al., 25-cv-2114-BAH (D. Md.)

This new proposal reflects changes in circumstances and new supporting information since the original policy was established in June 2025 and would allow for Exchanges on the Federal platform to conduct verification for additional SEPs beyond loss of minimum essential coverage and require Exchanges on the Federal platform to conduct verification for at least 75 percent of new enrollments [through SEPs].

As noted above, there are a variety of circumstances under which people can become eligible for a Special Enrollment Periods (SEP) outside of Open Enrollment. By far the most commonly cited case is Loss of Minimum Coverage (ie, losing employer-based insurance, no longer being eligible for Medicaid, etc).

Last year, the Trump regime attempted to crack down on SEP enrollment by dramatically expanding their verification requirements for any type of SEP by requiring people to upload documentation (marriage certificate, birth certificate, etc) to prove that they actually had a Qualifying Life Event (QLE).

This imposes a heavy burden on some enrollees, especially those who are low income, don't speak English, don't have access to a computer/internet, aren't tech savvy enough to scan & upload the documentation, etc.

A federal court put the kibosh on this crackdown, stating that the Trump regime provided no actual evidence of enough people fraudulently enrolling via SEPs in order to justify forcing them to jump through these types of verification hoops.

Trump's HHS is trying to push the SEP crackdown again, this time claiming to have evidence of fraud. I'd take that with a huge grain of salt, but we'll see what the courts have to say about it.

18. Repeal Standardized Plan Options and Non-Standardized Plan Option Limits and Exceptions Process

CMS proposes to discontinue (1) the requirement for FFE and SBE-FP issuers to offer standardized plan options in the individual market, and (2) the limit on the number of non-standardized plan options that may be offered by FFE and SBE-FP issuers, and the related exceptions process.

If you've ever shopped around on HealthCare.Gov, you've likely seen a pop-up option referring to "Easy Pricing Plans" with a description like this:

"Easy pricing plans have the same out-of-pocket costs and care before deductibles for some services."

These are a subset of the total number of policies offered--for instance, in Oakland County, Michigan this year, there's 61 plans total, of which 24 are "Easy Pricing" plans. This is another name for "Standardized Plans" which have been the norm on several state-based ACA exchanges for years (California and Massachusetts come to mind) but which have only been experimented with on & off on HealthCare.Gov.

The idea behind standardized plans is to minimize confusion and make it easier for enrollees to run apples-to-apples comparisons by requiring co-pays, coinsurance and deductibles to be identical for every plan within the same metal level, instead of having them all over the place ($10 for this, $15 for that, $25 for the other depending on which plan you're looking at).

I'm a big believer in standardized plans...however, I've never been a huge fan of the way that HealthCare.Gov has implemented them in the past because they've always had standardized plans in addition to non-standardized plans...which in my view actually makes shopping around more complicated, not less! Basically you're tacking on another couple dozen policies to look at on top of dozens of existing ones.

By contrast, in states like California, all exchange plans are standardized, so if you shop around for Silver plans, for instance, the deductible, out of pocket maximum, and co-pays for various services are identical regardless of which plan or carrier you go with. The main differences are a) the carrier; b) the premium; c) the network; d) the plan type (HMO, PPO, EPO) and e) any other extra benefits they may tack on.

I assume both the Obama (and later, Biden) administrations were trying to transition over to "standardize plans only" at some point, but IMO the transitional phase (offering dozens of non-standard plans plus standardized plans) actually added to the confusion, so scrapping this doesn't bother me as much as you might think it would.

ON THE OTHER HAND, removing the limit on non-standardized plans entirely is insanity. According to Keith/Fiedler, there are now an average of over 100 plans available per enrollee which makes for a comparison nightmare. You could theoretically end up with, like, 1,000 different plans, many of which would be nearly indistinguishable from each other without poring over every minute detail of the explanation of benefits (and possibly not even then).

19. 2027 FFE and SBE-FP User Fee

Per section 1311(d)(5)(A) of the ACA, CMS charges user fees to participating issuers as a means of generating funding to support its operations of the FFE and SBE-FP. For the 2027 benefit year, CMS proposes an FFE user fee rate of 2.5 percent of monthly premiums and SBE-FP user fee rate of 2.0 percent of monthly premiums, which are the same as the user fee rates established for the 2026 benefit year.

FFE = Federally-Facilitated Exchange; SBE-FP = State-based Exchange, Federal Platform. This refers to the 30 states with ACA exchanges hosted by HealthCare.Gov, as opposed to the other 21 which operate their own website platform. Healthcare.Gov's operations, including the website hosting, maintenance, administration, call centers etc. are paid for via 2.5% of enrollee premium revenue for 28 states or 2.0% for Arkansas and Oregon. They plan on keeping these fees the same next year, which is...fine, actually.

20. Sunsetting the Vendor Training Program

CMS proposes to remove the requirements in § 155.222 that HHS will approve vendors to facilitate annual agent and broker training on an annual basis for a given plan year, effectively discontinuing the vendor program. Agents and brokers will still have full access to complete annual Exchange training and registration requirements via the Marketplace Learning Management System (MLMS).

I don't know much about it, but according to this section of HealthCare.Gov, anyone who wants to become a certified ACA agent/broker is required to complete a training course:

• IMPORTANT: You can take free training from CMS, or sign up for a paid course through a CMS-approved vendor. Vendor training may offer continuing education units (CEUs). Free CMS training doesn't offer CEUs.
• Log in to the CMS Enterprise Portal
• Select Complete Agent Broker Training.
• Select the Access Training link next to Marketplace Learning Management System (MLMS) or a CMS-approved vendor.
• Complete the required profile information and select Save/Update. (If you're taking training with a CMS-approved vendor, you'll do this before signing the CMS Privacy and Security agreements.)
• Select the appropriate curriculum (Individual Market or SHOP).
• Enroll in the curriculum and select Complete Enrollment.
• Complete all required training.

If I'm reading this correctly, it sounds like you can still get the training for free via CMS itself, you just won't be able to get it via a 3rd-party paid vendor. I'm not sure why anyone would pay for it if they can get it for free in the first place...I guess for the CEUs? According to my colleague Louise Norris, very few people do that, so I guess it's not a terrible thing to shut down this particular program (shrug).

21. Limit APTC Eligibility to “Eligible Noncitizens”

CMS proposes updating its regulations to align with section 71301 of the WFTC legislation which requires an individual to be an “eligible alien” to be allowed a PTC, and therefore APTC and CSRs, and requires Exchanges to verify applicants’ “eligible alien” status. CMS also proposes conforming updates to the Basic Health Program (BHP) regulations to define “eligible noncitizen” and specify that an individual must be a citizen or eligible noncitizen for that individual to be included in the calculation of federal BHP payments to states in states that operate BHPs, beginning with plan years starting on or after January 1, 2027.

22. Disallow APTC for Individuals Who are Ineligible for Medicaid Due to Their Immigration Status and Have Income Below 100 Percent of the Federal Poverty Level (FPL)

To align Exchange regulations with section 71302 of the WFTC legislation, CMS proposes to remove the requirement that an Exchange must determine a tax filer eligible for APTC if the Exchange determines that they are expected to have an annual household income of less than 100 percent of the FPL for the benefit year for which coverage is requested and they are a noncitizen who is lawfully present and ineligible for Medicaid due to their immigration status. Because federal BHP payments to states are tied to the amount of PTC a BHP enrolled individual would have received had they instead enrolled in a QHP, BHP enrollees in this population would no longer be included in the calculation of federal BHP payments beginning January 1, 2026. This proposal would align with statutory requirements and ensure that subsidies are reserved for eligible individuals.

DANGER, WILL ROBINSON.

Most of the provisions above are either mostly harmless or at least not horribly harmful at worst...but these two are just plain cruel. They're part of the Trump regime's all-out assault on immigrants regardless of their status.

First, it's important to understand that "WFTC legislation" stands for "Working Families Tax Cut legislation" which is simply a rebranding of Trump's so-called "One Big Beautiful Bill Act"...aka the Big Ugly Bill.

In most cases, lawfully-present immigrants in the United States aren't eligible for Medicaid--regardless of their income--until they've lived in the U.S. for at least five years. If their income is below 100% of the Federal Poverty Level, however, there's a provision of the ACA which--until now--allowed them to be eligible for ACA tax credits instead.

Unfortunately, this provision is now gone:

Beginning in 2026, the OBBBA eliminated a statutory exemption that had allowed certain lawfully present immigrants whose income is below 100 percent FPL to qualify for PTC. This exemption had extended an affordable coverage option to lawfully present immigrants who would otherwise be eligible for Medicaid, but are not because of their immigration status.

Broader restrictions will take effect in 2027 when the OBBBA newly limits PTCs to lawful permanent residents (i.e., green card holders), certain Cuban and Haitian immigrants, and individuals living in the United States through a Compact of Free Association. These “eligible aliens” must be reasonably expected to satisfy one of these categories “for the entire period of enrollment” for which they claim the tax credit. Although enrollees can attest to their citizenship or immigration status, exchanges must take additional steps to verify an attestation.

So who isn't eligible for ACA tax credits any longer (or won't be starting next year) under the OBBBA? Well, in addition to those legally present for less than five years, others who are about to be royally screwed include refugees, parollees, those granted asylum and even victims of domestic abuse and human trafficking.

Let me repeat that: Victims of domestic abuse and human trafficking.

These changes would affect about 1.5 million lawfully present marketplace enrollees who would no longer qualify under the OBBBA’s narrow eligibility restrictions. This includes (1) about 237,000 FFE enrollees who were ineligible for Medicaid due to their immigration status and who lost subsidy eligibility in 2026; and (2) about 1.23 million other lawfully present individuals who will lose subsidy eligibility in 2027.

But wait, it gets even worse:

...HHS would also add a definition of “eligible noncitizen” to the Basic Health Program (BHP) rules. This change would not affect BHP eligibility—since the OBBBA did not bar lawfully present individuals from enrolling in the BHP. But only “eligible aliens” would be counted towards federal BHP payments to states beginning in 2027. As a result, states that operate a BHP would see federal BHP spending reduced by about $100 million in 2026, $118 million in 2027, $111 million in 2028, $112 million in 2029, and $113 million in 2030.

This is a major part of the reason why New York, which currently has over 1.7 million residents enrolled in their expanded BHP program, announced last fall that they're going to have to massively shrink the program's scope starting in July, resulting in around 450,000 New Yorkers currently enrolled in the program being kicked off of it.

IMPORTANT: You have until March 13th to SUBMIT A PUBLIC COMMENT to CMS about any of the proposed changes listed above!

It may not make any difference but believe it or not sometimes it does, even under the Trump regime...and in fact in some cases they're actively stating that they're seeking comment as opposed to just ramming the proposed changes through.

That's areas 13 - 22 out of 34 total. I'll tackle the final batch in Part 3 later this week.