In its first healthcare proposed regulation, the Trump Administration, through the Centers for Medicare & Medicaid Services (CMS), displayed on March 10, 2025, a proposed rule titled, "2025 Marketplace Integrity and Affordability Proposed Rule" (the Proposed Rule), which proposes policy changes for the Health Insurance Marketplaces that impact health plans and insurers offering Affordable Care Act (ACA) coverage to consumers. Specifically, the Proposed Rule shortens the Annual Open Enrollment Period (OEP) for all individual market coverage; proposes standards related to income verification for Health Insurance Marketplaces (Marketplaces); modifies eligibility redetermination procedures; and eliminates eligibility for "Deferred Action for Childhood Arrivals" (DACA) recipients, among other provisions.
The Proposed Rule was published in the Federal Register on March 19, 2025 (and previously available via a press release and fact sheet issued March 10, 2025). Stakeholders have 30 days after display (as opposed to publication in the Federal Register) to submit comments on the Proposed Rule. Comments will close on April 11, 2025.
Key Takeaways
- In issuing the Proposed Rule, the Trump Administration is aiming to undo several Biden Administration policy positions and, in some cases, reinstating policies that were implemented during the first Trump Administration. It proposes to implement several Trump Administration policy priorities, including countering fraud and abuse in health care, reducing "adverse selection" in enrollment, and addressing other issues related to gender-affirming care and immigration.
- Healthcare stakeholders should pay attention to the effective dates of provisions included in the Proposed Rule. Several provisions would be finalized when the final rule is issued, while others would become effective on specific dates, beginning in 2026.
- Stakeholders should also note that the Proposed Rule includes a severability clause in anticipation of litigation and challenges in the courts. In point of fact, the Proposed Rule notes in several places that preliminary injunctions and other court actions that have been taken in response to executive orders and policies that have been issued by the Trump Administration.
Overview of Proposals
In the preamble of the Proposed Rule, CMS justifies issuing the proposed regulatory changes by referencing a memorandum issued by President Trump on January 20, 2025 that instructs all executive departments and agencies to deliver emergency price relief, including appropriate actions to "eliminate unnecessary administrative expenses and rent-seeking practices that increase healthcare costs." It asserts that the Proposed Rule aligns with several executive orders signed by President Trump that seek to advance the Administration's policies, including on gender-affirming care (or "sex-trait modification" as that phrase is used by the Trump Administration) and immigration issues. CMS states that it is proposing these changes "to improve program integrity and protect against adverse selection, while at the same time keeping the enrollment process streamlined and accessible." In the Proposed Rule, the Trump Administration cites the ACA's existing individual market rules requiring issuers to guarantee coverage to all applicants regardless of pre-existing conditions and restricting issuers from setting premiums based on health status as a rational for many of the proposed changes. More specifically, CMS says that these individual market rules create an inherent bias towards adverse selection (i.e., a situation where individuals with higher health risks are more likely to select coverage than healthy individuals) by allowing people to wait to enroll in coverage until they need health services. Additionally, throughout the Proposed Rule, CMS expresses concern about fraudulent enrollment as a primary justification for many of its program integrity proposals.
Below we summarize the various provisions included in the Proposed Rule.
Shortening the Annual Open Enrollment Period
The Proposed Rule aims to limit the annual OEP to 45 days, from November 1 through December 15 preceding the coverage year, instead of through January 15 of the coverage year. This change would also apply to non-grandfathered individual health insurance coverage offered outside of an ACA Health Benefit Exchange (Exchange). CMS states that this change is warranted to protect the stability of the individual market and reduce adverse selection. Further, it states that Marketplace consumers are now accustomed to the December 15 deadline and a single December 15 deadline would reduce consumer confusion. If finalized, this proposal would take place beginning with the OEP for 2026.
Eliminating DACA Eligibility
For purposes of enrollment in a qualified health plan (QHP) offered through an Exchange or a Basic Health Program (BHP), CMS proposes to modify the definition of "lawfully present" (at 42 C.F.R. ยง 155.20) in a key way that specifically excludes DACA recipients from that defined term. DACA recipients are currently eligible to obtain health insurance coverage through either channel. CMS states that under the original ACA expansion to DACA recipients, an estimated 100,000 DACA recipients would receive coverage. Notably, however, actual Exchange enrollment of DACA recipients has been much lower, with CMS now estimating current enrollment of about 11,000 DACA recipients who would be affected if the proposed rule is finalized.
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