Enrollment in the Marketplace has doubled from about 11.5 million people in 2021 to more than 24 million for plan year (PY) 2025. However, there are allegations of fraud due to policies of the previous Administration that some claim have made it too easy to enroll. While agent and broker fraud has been spotlighted in the last year, this rule mainly focuses on the potential for enrollees—often those with the lowest incomes—to misrepresent their income in order to qualify for subsidies or game the system to enter only when they are sick. One prime target is the low-income population in states that did not expand Medicaid for adults, which, some say, motivates uninsured people to inflate income above the federal poverty line (FPL) to qualify for APTC. One estimate cited in the proposed rule is that as many as four to five million people are fraudulently enrolled.

Some policies will, on balance, reduce enrollment.

• Tightening Up Income Verification Rules. This proposed rule bolsters income verification in three ways: requiring income verification when data sources indicate that income is under 100 percent of the FPL; requiring income verification when tax data is unavailable, which often happens with young adults who are new to filing taxes or for people who have income that is below the tax filing requirement; and reducing the time applicants have to resolve income data matching issues from 150 to 90 days.
• Ending the Special Enrollment Period (SEP) for People With Income up to 150% of the FPL. The proposed rule eliminates the SEP for low-income individuals to enroll in the Marketplace or change plans in any month. The preamble here finds that people—including with the help of agents, brokers or Navigators—may “underestimate their income to take advantage of fully subsidized plans outside of the [open enrollment period]” to be eligible to enroll in any month when they need coverage.    
• Eliminating Eligibility for People With Deferred Action for Childhood Arrivals (DACA) Status. As anticipated, CMS would redefine “lawfully present” to exclude DACA recipients from receiving PTC or being eligible to enroll in a Basic Health Program. Treating DACA recipients as not lawfully present also has the effect of excluding them from eligibility to enroll in the Marketplaces, even at full cost, due to the Affordable Care Act’s (ACA’s) eligibility limitation for people who do not qualify as lawfully present.
• Requiring Payment of Past-Due Premiums. The proposed rule allows issuers to deny enrollment for people who owe past premiums. Under this proposal, a premium payment would first be applied to previous past-due amounts, including for the initial “binder” payment that effectuates new coverage.
• Reducing the Flexibility of the Premium Payment Threshold. For PY 2026, CMS created additional rules to expand issuers’ options to create a payment threshold less than the full premium at which enrollees can maintain their coverage that is: (1) an amount that is at least 95 percent of the net premium paid by the enrollee; (2) an amount that is at least 98 percent of the gross monthly premium, or (3) a fixed-dollar amount that is up to $10. Citing program integrity concerns, this proposed rule scales back the circumstances in which the premium payment threshold is used to an amount that is no greater than 95 percent of net premium.        
• Ending Fully Subsidized Automatic Re-Enrollment. Some people have their coverage fully subsidized, where APTC covers their entire premium. Going forward, people who are eligible to be automatically re-enrolled in a zero-dollar plan (with the full premium paid by APTC) would instead have their APTC decreased such that they have a $5 premium. The enrollee can enter their Marketplace application at any time to reconfirm their plan and again be fully subsidized.
• Failure to File Taxes and Reconcile APTC. Enrollees who receive an APTC are required to file taxes and reconcile the credit, with their final credit amount based on their actual year-end income, household size, and filing status. Failure to do this can result in denial of an APTC to offset up-front premium costs. In this proposed rule, CMS asserts that today’s looser rule that cuts off APTC only after two consecutive years without tax reconciliation creates a “substantial risk of improper enrollment” and hurts consumers because of the potential for accumulating increased tax liabilities. Therefore, CMS proposes to shorten this period to one year beginning in Fall 2025 for PY 2026.   

Some of the proposals will tend to increase premiums and others may decrease them. Among the notable policies that may swing premiums.

• Curtailing “Crosswalks” to More Advantageous Plans. In PY 2024, CMS began crosswalking people who were automatically re-enrolling from bronze plans to silver plans, if there was one available in the same product, with the same provider network, and the same or lower premium. CMS now believes that removing someone from a plan they previously chose harms enrollees and proposes to end this crosswalk.
• Prohibiting Coverage of “Sex-Trait Modification” as an Essential Health Benefit (EHB). To qualify as EHB, benefits must be provided under a typical employer plan and be among the ten EHB categories outlined in the ACA. The proposed rule says that gender affirming care does not meet that test. Plans may still opt to cover such services, but, as non-EHB, they would not be eligible for PTC. Further, states can still opt to mandate coverage in their EHB benchmark plans, as five have (California, Colorado, New Mexico, Vermont and Washington), but they would be subject to defrayal rules, meaning that the state would be required to pay for the cost of the benefit.
• Lowering Actuarial Value. The ACA prescribes the actuarial value of the metal levels for individual and small group market plans, but issuers have some leeway in designing plans above and below that target. The proposed rule would give issuers a wider berth. The biggest proposed changes are widening the range to +2/-4 percentage points for individual and small group silver plans and +1/-1 for silver cost-sharing reduction variations. Issuers have told CMS, according to the preamble, that the current narrower bands constrain issuer flexibility in designing cost sharing. This additional freedom could allow, for example, a plan to have an actuarial value of 66 percent instead of 70 percent and still qualify as a silver plan; this could enable issuers to offer plans with lower premiums but would also decrease the APTC people receive, leading to a net premium increase.
• Premium Adjustment Percentage. The premium adjustment percentage methodology sets a measure of premium growth that affects several calculations, notably the annual limitation on MOOP cost sharing for all individual and group plans, including employer-sponsored plans. Currently, the premium growth measure is based on the annual growth rate of employer-sponsored insurance. In a technical but important change, this proposal would also include the individual market, which tends to have a faster premium growth rate. The Department of the Treasury and IRS have adopted the HHS-endorsed methodology in the past to establish amounts such as the income-based premiums subsidized people pay. Under the proposal, the MOOP would increase by 15.2 percent over 2025 amounts and premiums for people eligible for cost-sharing reductions would increase by as much as 4.5 percent.

SBMs currently take advantage of the available flexibility to reduce administrative burdens and create opportunities for people to enroll. The proposals above would restrict some of this flexibility. This proposal would also shorten the open enrollment period for all Marketplaces to November 1 to December 15.