Ignoring Advocate Warnings, Trump Administration Finalizes Harmful ACA Marketplace Changes

People who buy coverage individually through the marketplace will face new hurdles and weaker protections under a final rule issued by the Trump administration, which promotes plans with higher deductibles and cost-sharing, allows plans with no provider networks, and creates new administrative barriers to enrollment and coverage.

Each year, the Centers for Medicare and Medicaid Services (CMS) releases the Notice on Benefit and Payment Parameters (often called the "payment rule"), which outlines how the Affordable Care Act marketplaces will operate in the following year. Despite widespread concern from advocates, CMS finalized nearly all of the harmful policies it proposed earlier this year - cementing changes that will allow plans to offer worse coverage with fewer consumer protections.

Below is a summary of the key provisions in the final rule that will negatively impact consumers who purchase coverage on their own:

• Expands eligibility for "catastrophic" plans with increasing out-of-pocket costs: Catastrophic plans offer minimal coverage and very high deductibles: $15,600 for an individual, or $27,600 for a family. The final rule does three things: 1) allows people who are below poverty (i.e. less than $33,000 for a family of four) or above 250% of the federal poverty level (about $82,000 for a family of four) to enroll in these plans if they do not qualify for premium tax credits or cost sharing reductions; 2) significantly raises the out-of- pocket costs that people might experience in these plans and 3) establishes a new form of "multi-year" catastrophic plans. While the Trump administration argues these efforts are creating new pathways for families to get health care coverage, these options are simply unaffordable and often unwise for low and moderate- income families.
• Restricts eligibility for lawfully present immigrants: Implementing H.R. 1, the final rule narrows eligibility for premium tax credits to "eligible noncitizens" instead of a broader category of lawfully present immigrants that have historically qualified. The rule also denies tax credits to people below the federal poverty level who are ineligible for Medicaid due to current federal law that already restricts access to Medicaid services based on immigration status. The rule also denies federal payment for this population to states with Basic Health Programs. This change harms access to health care for more than one million lawfully present immigrants who rely on marketplace coverage and another 10,000 who rely on coverage through a Basic Health Plan (available in the District of Columbia, Minnesota, New York and Oregon).
• Weakens access to care by reducing provider network protections: CMS finalized a policy allowing marketplace plans to operate without provider networks - meaning consumers could purchase coverage that does not guarantee access to any doctors or hospitals. These plans risk functioning like "coverage in name only," leaving patients unable to find providers who accept their insurance. In 2027, states may take on responsibility for assuring network adequacy, including in states using the federal marketplace - so it will be important for advocates to monitor the effectiveness of their oversight and lift up network adequacy concerns both to the state and to CMS.
• Makes it harder to maintain and improve benefit standards: Under federal law, all marketplace plans must cover a core set of services known as "essential health benefits" (EHBs), so consumers know they are purchasing meaningful coverage. Some states have expanded beyond the federal minimum to cover additional services such as opioid use disorder treatment, improved maternity care, and gender-affirming care. Other states are in the process of adding routine adult dental care to their EHBs. However, under the final rule, states will be prohibited from mandating coverage of EHBs through statute or regulation, unless the state pays out of pocket for any benefit improvements adopted after 2011. The rule also explicitly prohibits coverage of routine adult dental care as an EHB. These changes will make it harder for states to respond to evolving health needs and expand access to critical services.
• Increases enrollment barriers by requiring more paperwork: The rule finalized new income verification and enrollment requirements, creating more administrative hurdles that can result in eligible people losing coverage. These hurdles disproportionately affect low-income individuals and families, increasing the risk that eligible people will lose or forgo coverage due to administrative complexity.

Two important wins: CMS cracks down on fraudulent behavior by brokers and agents and does not finalize enrollment platform changes

First, CMS finalized its proposal to prohibit agents and brokers from engaging in certain marketing practices such as providing cash or cash equivalents to enroll, falsely asserting that consumers will qualify for zero-dollar premium plans, and miscommunicating enrollment timelines and deadlines. Some brokers and agents have used these predatory marketing practices to mislead consumers into signing up for unnecessary or inappropriate levels of coverage. The rule also establishes mandatory, standardized eligibility application and consumer consent forms to protect consumers from signing forms that may result in enrollment into plans that do not meet their needs. However, it also introduces a restrictive definition of "sex," raising concerns about how nondiscrimination protections will be enforced.

Second, CMS did not finalize its proposal to allow states to outsource the operation of their online enrollment platform to third parties through enhanced direct enrollment (EDE) - one area of concern in the proposed rule flagged by Families USA and other health coverage advocates. While CMS could revisit this decision in future years, for now, this is a meaningful victory for consumers, as these platforms have been linked to unauthorized plan switching and fraudulent enrollments. By maintaining stronger oversight of the enrollment process, CMS avoided further increasing the risk of consumer harm in this area.

The Bottom Line

With this final rule, CMS has largely moved forward with policies that make marketplace coverage more expensive, more confusing, and less protective for consumers. While the decision not to expand privatized enrollment platforms is a welcome step, it is far outweighed by the broader set of changes that will erode access to affordable, comprehensive health coverage for millions of people.