This week, our In Focus section also reviews the 2025 Marketplace Integrity and Affordability Proposed Rule, released by the Centers for Medicare & Medicaid Services (CMS) on March 10, 2025. The proposed rule calls for enhancing program integrity protections in the Affordable Care Act (ACA) marketplaces through targeted changes to eligibility and enrollment policies and procedures.
This proposed rule aligns with the overarching policy priorities President Trump has identified, including reducing federal costs and reforming policies related to immigrants. It also takes aim at fraud, waste, and abuse practices in the ACA Marketplaces, which is the cornerstone from which the US Department of Health and Human Services explains and justifies its proposed initiatives.
Notably, the proposed changes will occur alongside other potential federal policy revisions, including the December 31, 2025, expiration of the ACA enhanced subsides for consumers, which led to historically high coverage levels—nearly 24 million people were enrolled in the Marketplace as of January 2025. The combined changes will have a varied but significant effect on all state health insurance markets, creating a need for scenario planning and preparation to start immediately.
CMS is providing the public 30 days to submit comments on the proposed rule. An overview of the proposed changes and key considerations follow.
Rule Components
Enrollment Timeline: CMS proposes shortening the open enrollment period for all individual market coverage, including for state-based marketplaces (SBMs), which traditionally have had flexibility to set later enrollment deadlines. If finalized, open enrollment will begin November 1 and end December 15, a month earlier than the current deadline of the following January 15.
Income Verification: The rule would require marketplaces to bolster their income verification processes to protect against manipulation of the authorization and calculation of advance premium tax credit (APTC) values. CMS policymakers believe these changes will be useful in addressing broker and consumer fraud and abuse of the APTC eligibility process. Proposed income verification changes include requirements that people provide the documentation of their income if they meet the following criteria:
- The income on their application is between 100 percent and 400 percent of the federal poverty level (FPL), but the income returned from external data sources show they make less than 100 percent of the FPL
- No tax data are available from external data sources to confirm the applicant’s self-attested income
Applicants who do not verify their income will have it adjusted to align with the income returned from external data sources, and their APTC eligibility will be updated accordingly. In some cases, such as when no returned income data are available, these individuals will become ineligible for the APTC.
CMS also plans to reinstate a 2015 policy that requires marketplaces to designate applicants or enrollees as ineligible for APTCs if they fail to file and reconcile their APTC on their federal income taxes. This requirement is known as the failure to file and reconcile (FTR). The Biden Administration changed the FTR requirements to find enrollees ineligible for APTCs if they fail to file and reconcile for two consecutive tax years.
Lastly, CMS proposes eliminating the additional 60 days consumers are granted to resolve income inconsistencies. Today, most marketplace consumers have up to 150 days to resolve income inconsistences. This proposal would return to the 90-day verification period that was in place prior to the Biden Administration.
CMS also requests input on alternative redetermination and re-enrollment policies for fully subsidized consumers, including whether $5 is the appropriate premium amount or should be higher or if fully subsidized consumers should be required to actively confirm their eligibility and reenroll every year.
Another proposal would remove the ability for marketplaces to automatically reenroll Bronze members who are eligible for a cost-sharing reduction (CSR) in a Silver plan if the Silver plan has the same provider network, is in the same product, and has a lower or equivalent net premium as the consumer’s Bronze plan.
Special Enrollment Period Changes: CMS is proposing multiple changes to special enrollment periods (SEPs), including the removal of monthly SEPs for individuals with household incomes that are projected to be at or below 150 percent of the FPL and a requirement that marketplaces verify eligibility for at least 75 percent of new enrollments during SEPs. CMS also proposes adopting a pre-enrollment income verification model for SEPs.
- Bar Deferred Action for Childhood Arrivals (DACA) recipients from QHPs in the Marketplace and basic health programs, making them ineligible for APTCs and CSRs and returning to pre-Biden era DACA eligibility rules
- Remove gender-affirming care as an essential health benefit
- Allow insurers to require payment of past due premiums before effectuating new coverage, if state law permits
- Increase cost sharing/lower premiums by increasing the maximum out-of-pocket limit and widening de minimis ranges
Implications
CMS is reverting to several policies that were put in place during President Trump’s first term, increasing the likelihood that CMS will finalize many of the changes as proposed or with minimal modification.
Insurers, SBMs, insurance departments and other stakeholders should engage in the federal policymaking process and begin planning immediately for the financial and operational changes that will be required to comply, as several of the requirements will take effect as soon as the rule is finalized. Stakeholders will also want to consider the direct impact on consumers.
Health Management Associates (HMA) Marketplace experts identified the six key considerations for stakeholders:
- Market share and risk. The proposed changes are projected to decrease Marketplace enrollment and Insurers and states need to plan for shifts in their market and consider approaches to manage these changes.
- Administrative operations. A shorter enrollment period and additional eligibility and enrollment requirements may increase administrative actions for enrollees, insurers, and marketplaces. Examples include:
- Marketplaces will need to make system and operational changes to comply with the new income verification, SEP, and open enrollment period requirements.
- Departments of Insurance may need to adjust their rate and form filing instructions and timelines to give insurers the clarity and time they need to comply with new requirements.
- Consumer education. Insurers and marketplaces will need to consider the effectiveness of their marketing and outreach and education strategies, given the shorter open enrollment period.
- Interactions with the expiration of the enhanced subsidies in 2026. The Congressional Budget Office estimates that the uninsured population will increase by 2.2 million in 2026 and up to 3.8 million by 2028 if the enhanced ACA subsidies expire. While it is too early to project or measure the impact of this proposed rule and the expiring subsidies, together they undoubtedly will have direct impacts on eligibility, enrollment levels, market dynamics including pricing and risk mix, and the overall stability of the Marketplaces in the long term. Congress may also take action on other policies related to Marketplace stability for which stakeholders should prepare.
- State-level mitigation. States interested in mitigating the impacts of this proposed rule, as well as the expiring subsidies, will need to consider legislation to address the resulting affordability gaps and coverage losses. For example, states may look to state-funded subsidy wraps or reinsurance programs to minimize the net premium rate increases that most Marketplace plan members will experience when the enhanced subsidies expire in 2026.
- Federal engagement. CMS is providing the public 30 days to comment on the proposed rule. This provides stakeholders the opportunity to voice their positions on the impact of this and future Marketplace policies. Comments on the proposed rule may also be shared with congressional policymakers and staff to help shape future legislative proposals.
HMA experts have considerable experience working with marketplaces, Departments of Insurance, insurers, and federal policymakers with jurisdiction over the Marketplace. They work with these entities to inform, analyze, and influence federal policies and conduct impact analyses on pricing, enrollment, administration, and operations. HMA also provides strategic and project management support for the implementation of finalized policies.
To learn more about how the proposed rule and the scheduled sunsetting of enhanced subsidies may affect your organization contact HMA Marketplace experts below.
