Newsletter

CMS ISSUES FINAL 2025 MARKETPLACE INTEGRITY AND AFFORDABILITY FINAL RULE

CMS (Medicare) issued final Affordable Care Act integrity and affordability provisions on June 20. It's estimated that between 750,000 and 2 million people will lose coverage as a result of these new regulations and that there will be savings of $11B as a result of implementing these changes. The new rule sets additional standards for the Health Insurance Marketplaces and finalizes additional safeguards to protect consumers from improper enrollments and changes to their health care coverage, as well as establishes standards to ensure the integrity of the ACA Exchanges.

We had previously reported that the open enrollment period for 2026 would run between November 1 and December 15. However, the final rule defers changes to the open enrollment period for the Fall of 2026 to affect 2027 plans. The Open Enrollment Period on healthcare.gov in 2026 and future years will run from November 1 to December 31, and any enrollments during this period will be effective the following January 1. (The opportunity to enroll during open enrollment for a February 1 effective date is being eliminated.)

CMS is implementing a requirement that 75% of all applications made outside of the open enrollment period in 2026 on healthcare.gov be subject to pre-enrollment verification. This requirement will sunset at the end of 2026 and does not apply to state-based marketplaces.

Some other important changes include the following:

1. Increased requirements for re-payment of past-due premiums. Consistent with applicable state law, payment of BOTH initial and past-due premium amounts will be required to effectuate new coverage.

2. DACA recipients will no longer be permitted to enroll in a plan through the Marketplace.

3.  Individuals who fail to file and reconcile advance premium tax credits for more than one year (previously two years) will not be eligible for tax subsidies.

4.  Individuals who passively enroll in a plan (i.e., are renewed automatically) and who otherwise would have $0 premium will have to pay a $5 monthly premium until and unless they act to actively enroll in a plan. This provision will sunset as of December 31, 2026.

5.   The special enrollment period eligibility that permits those earning 150% or less of the Federal Poverty Level (FPL) is being eliminated.

6. Marketplaces will no longer automatically re-enroll Cost Sharing Reduction (CSR)-eligible enrollees from bronze plans into silver CSR plans.

7. The marketplace will make more intensive investigations into applications of applicants whose income falls between 100 and 150% of the Federal Poverty Level to verify income actually falls into this level and to identify and not permit enrollment of people whose projected earnings are under the minimum eligibility (100% for non-Medicaid expansion states and 138% for Medicaid expansion states).

This article in Axios provides further information about the changes. According to Medicare (CMS), insurance losses resulting from these new regulations will be felt hardest in states where "erroneous and improper enrollment is most noticeable," including Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Texas, and Utah.

See this fact sheet published by CMS that contains additional details about and the reasons for making some of these changes.

CBO AFFIRMS TAX BILL CUTS HEALTHCARE $1T, RAISES DEFICIT $2.8T

According to an article written by Michael McAuliff and published in Modern Healthcare on June 17, according to the Congressional Budget Office and the Joint Committee on Taxation the House version of the “One Big Beautiful Bill” over the next ten years will cause a $1 trillion loss to the healthcare sector and increase the federal budget deficit by $2.8 trillion over ten years. 

Although there are many differences among individual Senators, the Senate is attempting to reduce the cost of healthcare and other programs further to help lower the projected budget deficit.

According to McAuliff, Senate Republicans are eying even deeper Medicaid cuts and stricter limits on the provider taxes states use to finance the program under legislation introduced June 16. The House-passed version of the One Big Beautiful Bill Act of 2025 would establish a moratorium on new provider taxes. The Senate Finance Committee portion of the upper chamber’s bill would go further by ordering the District of Columbia and the 40 states that expanded Medicaid under the Affordable Care Act of 2010 to reduce their provider taxes.

And on June 11 the Senate Health, Education, Labor, and Pensions Committee introduced legislation that would end what is called “silver loading.” If this change is contained in the final legislation, the effect will be to increase the cost of Silver cost sharing reduction plans because net premiums after application of advanced premium tax subsidies would be increased. It’s estimated that up to 300,000 participants will not be able to afford Affordable Care Act plans if this change is implemented. This is in addition to the much larger number of participants who will not enroll in ACA plans because of failure to extend enhanced tax credits past December 31, 2025.

The President has established a timetable of July 4 for passage of the “One Big Beautiful Bill.” This is a very aggressive timetable that we think is not likely to be met. This newsletter is being written on June 25 and the Senate still needs to pass its version of the legislation, the House-Senate Conference Committee needs to iron out differences between the House and Senate versions of the Bill, both chambers of Congress need to pass the final Bill, Republican majorities in both Houses of Congress are razor thin, and the President needs to sign the legislation.

WHERE THE ONE BIG BEAUTIFUL BILL'S CUTS WILL HIT, STATE BY STATE

(MH Illustration/Adobe Stock)

This article by Tim Broderick that appeared in the June 19 issue of Modern Healthcare projects that healthcare spending would be cut by almost $800 billion over the next 10 years, with hospitals bearing the brunt of the reductions if the House-passed version of the One Big Beautiful Bill Act of 2025 becomes law. Over the next decade, the Bill would decrease spending by $321 billion in hospitals, $81 billion among physicians and $191 billion for prescription drugs. Spending for other healthcare services would decline by $205 billion. All sectors—Medicare, Medicaid, individual and family, and group insurance—would be affected by these changes.

The article also includes a state-by-state-analysis of how individual states will be impacted. The most highly impacted states would be CA ($100B), TX ($67.5B), NY ($61.6B), and FL ($55.8 B).  

ONE BIG BEAUTIFUL BILL HAS 35% APPROVAL RATING: KFF POLL

Nearly two-thirds of the public view President Donald Trump’s “One Big Beautiful Bill” unfavorably, according to a Kaiser Family Foundation KFF Health Tracking poll released June 17. The following analysis was prepared by Hayley DeSilva for Modern Healthcare.

Here are three key takeaways from the survey:

Many bill supporters changed their mind once cuts were explained

Of those who viewed the House bill favorably, 72% were MAGA Republicans, while 66% of Republicans and Republican-leaning independents opposed the bill.

MAGA support dropped by more than 20 percentage points after survey respondents were told about cuts to local hospital funding and that an estimated 10 million people would be without health insurance.

ACA support hits a new high

Support for the Affordable Care Act has been growing since 2017, during Trump’s first term, when Congressional Republicans attempted to repeal the law.

The survey found that 66% of people view the healthcare law favorably, the highest level of support received in a KFF poll since the law was enacted in 2010.

The level of support changes depending on political leanings — 63% of Republicans oppose it while 94% of Democrats and 71% of independents support it.

The Medicaid program was viewed favorably by 83% of those surveyed, compared with 77% in January.

Most support Medicaid work requirements, until care access comes into play

Two-thirds of participants said they supported work requirements for Medicaid, including 88% of Republicans, 93% of MAGA Republicans and 51% of Democrats..

When participants were told that most adults with Medicaid are working or unable to work and could lose coverage due to challenges with filing the necessary paperwork to prove they are employed, half of survey respondents changed their views and 64% opposed work requirements.

Overall support for work requirements increased to 79% when opponents were told that money saved could be used to fund Medicaid benefits for the elderly, people with disabilities, and children in low-income households.

FITCH: HEALTH SECTOR IS "DETERIORATING"

Medicaid funding cuts outlined in the “One Big Beautiful Bill Act” could lead to financial challenges for the insurance sector, according to a June 17 report from Fitch Ratings.

The credit rating agency lowered its outlook from “neutral” to “deteriorating” after the Senate released its proposed changes to the legislation on June 16, which called for more healthcare funding cuts than the House-passed version.

Diminished interest in Congress to extend enhanced premium tax credits — which were expected to offset Medicaid enrollment losses — also contributed to Fitch’s lowered outlook. If not extended, the enhanced premium tax credits will expire at the end of 2025.

Ending the tax credits will lead to “adverse consequences to premium revenue” for health insurers over the next year, the report said.

About Paul Cholak

Paul has over forty years of benefits experience and has been Director of Employee Benefits for large companies, as well as a benefits consultant with major consulting firms. He understands the health and life insurance needs of individuals and families of all ages. He also has considerable experience in selling health and life insurance to employer groups.

He guides you through the steps of getting health and/or life insurance and is available to help you both BEFORE and AFTER you've made your purchase decision.