What the Second Trump Administration Has in Store for the ACA Marketplace

Eligibility, enrollment, and affordability are at risk for millions of Americans who now rely on the Marketplace for health insurance.

On Mar. 10, HHS proposed the Administration’s first major healthcare rule with a companion press release and fact sheet. In them, the agency articulates how the rule will save money and prevent fraud, waste, and abuse.

There is no question that all undermine affordable healthcare and that all stakeholder groups contribute to high costs, even consumers. But among its policy positions, HHS communicates contradictory ideas: that the current ACA Marketplace is stable — yet artificially inflated, open to adverse risk selection, and no longer in need of cost- and access-friendly premium policies.

Health Affairs has a slightly different conclusion, noting in its two-part analysis: “The proposed rule is significant and would, if finalized, restrict marketplace eligibility, enrollment, and affordability . . . or erode the value of marketplace coverage.”

“HHS acknowledges as much,” the analysis adds, detailing each of the areas impacted and how up to 2 million people — mostly in Southern states — could lose coverage if the Marketplace’s advance premium tax credits (APTC) and enhanced subsidies are cut, beginning with the next plan year.

Affordability

Health Affairs notes that HHS — along with just about everyone else — “assumes that Congress will not extend the enhanced premium tax credits that expire at the end of 2025. As a result, most marketplace enrollees will see increased premiums.

Further increases could come from premium adjustment methodologies, reinstated from the first Trump Administration, which would raise premiums another 4.5% for subsidized benchmark plans. The new rule also proposed to raise maximum out-of-pocket costs (MOOP) by 15% to $10,600 (individuals) and $21,200 for families.

Enrollment

The Biden-Harris Administration extended the Marketplace Open Enrollment Period (OEP) to roughly 75 days — from November 1 to January 15 — and created a monthly Special Enrollment Period (SEP) for people at or below 150 percent of the federal poverty level.

The new HHS proposed rule would:

• again limit the annual OEP to 45 days from November 1 through December 15 and extend this federal requirement to state-based exchanges
• eliminate the monthly SEP for eligible low-income Americans — including those transitioning from Medicaid or CHIP — and impose SEP income verification requirements for at least 75% of new enrollees

Any kind of administrative change can adversely affect enrollment. This was one of the primary concerns of the Medicaid unwinding through 2024. HHS’s proposed Marketplace rule raises similar worries.

Eligibility and administrative burdens

HHS has already significantly reduced Marketplace and Medicaid consumer navigator funding from a Biden Administration annual high of $100 million to $10 million. If finalized, the HHS proposed rule could:

• eliminate Marketplace eligibility for Deferred Action for Childhood Arrivals recipients. These are the “Dreamers,” or undocumented immigrants who were brought to the United States as children
• prohibit gender-affirming care as a Marketplace essential health benefit
• deny guaranteed issue to enrollees with past-due premiums

In addition to the above, new/reinstated administrative requirements could also negatively impact eligibility, enrollment and affordability including:

• New upfront cost for auto-re-enrollment. $0 premium plans with no coverage changes would incur a $5 monthly premium at re-enrollment until enrollees confirm their eligibility.
• Loss of coverage due to premium underpayment. Marketplace premium payments are based on income, which can be difficult to estimate accurately for self-employed and gig workers. Those who underpay their premiums by even a small amount could lose coverage if they do not re-verify income and within a tighter time frame. Citing fraud concerns, HHS notes that this action would reduce federal APTC spending by $820 million in 2026.
• Loss of coverage due to premium tax credit reconciliation. Consumers who don’t meet reconciliation requirements could also lose coverage, even though administrative errors and IRS delays could wrongly classify them as non-compliant.

HHS estimates that these measures could save $1.16–$1.86 billion annually, but this would come at the expense of consumers. Hundreds of thousands could lose their APTC eligibility and become uninsured. Health Affairs notes that these changes are likely to impact young, healthy consumers disproportionately — worsening the insurance risk pool and likely driving premiums higher.

Timing

Components of the HHS rule would take effect with differing deadlines, many of which would be unrealistic and unfair per Health Affairs. For example, the elimination of the monthly SEP for low-income consumers would be effective with the final rule versus the end of the 2025 plan year, when enhanced premium subsidies could very likely expire.

We’ll all know a lot more after 30 days, when the comment period ends and HHS works to finalize the rule.