Dive Brief:

• New Trump administration policies meant to tackle fraud and abuse in Affordable Care Act plans would make it significantly harder for Americans to enroll in the coverage, experts say.
• On Monday, the CMS proposed a rule that would require ACA enrollees to provide more information to prove they’re eligible for subsidies and special enrollment periods, and charge people automatically re-enrolled in subsidized coverage a monthly premium until they confirm their eligibility.
• The rule would also shorten the annual open enrollment period for ACA plans by one month, and reduce opportunities for people with very low incomes to sign up for coverage. Between 750,000 and 2 million people will lose ACA coverage if the regulation is implemented as proposed, the CMS estimates.

Dive Insight:

The Biden administration made it easier and more affordable to sign up for ACA plans, causing enrollment to swell to an all-time high.

This year, 24 million Americans choose plans in the the exchanges set up by the decade-old law.

However, President Donald Trump’s administration appears to be following a playbook from his first term, when the CMS pursued policies that caused ACA enrollment to decline significantly. Last month, the CMS slashed funding for outreach and education, a move that patient advocates say will make it harder for Americans to access ACA coverage.

Monday’s proposed rule — the new Trump administration’s first regulation to reshape the U.S. health insurance landscape — would shrink the exchanges further under the guise of improving program integrity, according to health policy experts.

The 301-page proposal would require require ACA marketplaces to check consumers’ eligibility for special enrollment periods, and raise the burden of verification.

For example, people who fail to reconcile their tax information with their eligibility for subsidies currently have two years before they lose financial assistance. The rule would shrink that window to one year.

The regulation would also charge people automatically re-enrolled in subsidized coverage from one year to the next a $5 monthly premium until they confirm or update their eligibility information.

In addition, it would end a monthly special enrollment period for people with income below 150% of the federal poverty line to sign up for coverage outside of the normal enrollment window. And, the annual open enrollment period would run from Nov. 1 through Dec. 15, instead of through Jan. 15.

The proposals “take critical and necessary steps to protect people from being enrolled in Marketplace coverage without their knowledge or consent, promote stable and affordable health insurance markets, and ensure taxpayer dollars fund financial assistance only for the people the ACA set out to support,” the CMS said in a press release Monday afternoon.

Overall, the rule would reduce improper spending on ACA subsidies by $11 billion, according to the agency.

Targeting fraudulent enrollment has been a priority for both Republicans and Democrats amid growing complaints about unscrupulous brokers and unexpected signups.

In the first half of 2024, the CMS received almost 74,000 complaints from consumers that their plan was changed without their consent, and more than 134,000 complaints from consumers that they were unknowingly enrolled in a plan, the agency said at the time.

The Biden administration made it harder for insurance agents to make unauthorized changes to consumers’ coverage last year and expanded the CMS’ ability to punish bad actors in the exchanges in early 2025.

However, the Trump administration’s approach only nominally touches agents and brokers. Instead, the administration’s scorched-earth approach will negatively affect enrollees, especially the most vulnerable, according to Sabrina Corlette, the co-director of the Center on Health Insurance Reforms at Georgetown University.

“Under the auspices of, ‘We have to go after fraud and improper enrollment’ — which yes, was well-documented last year, there was a lot of fraud from a handful of unscrupulous brokers — instead of going after the brokers who are guilty of this, this rule does nothing to prevent that behavior,” Corlette said.

The CMS also said the rule would prevent adverse selection, when people wait until they’re sick to enroll in coverage, and lower premiums for enrollees.

Concerns about improper signups are legitimate, according to Corlette. However, the rule is unlikely to lower premiums because it will restrict subsidies for many enrollees, and probably boot healthier people out of the ACA’s risk pools.

“If people can wait until they’re really sick they will,” Corlette said. “On the other hand, if you make them crawl through broken glass to get coverage, the people who are going to crawl through broken glass are the sicker people, because they really need it.”

This rule is “like making people crawl through broken glass,” she said.

The policies would also likely be negative for insurers that have benefited from skyrocketing growth in the exchanges. Offering ACA coverage has hoisted otherwise shaky margins for many national payers over the past two years. Many have invested heavily to grow their ACA footprints as a result, a bet that would be threatened by the Trump administration restricting the exchanges.

AHIP, the main insurance industry lobby, said it is “closely reviewing” the rule.

“We look forward to working with the new administration to strengthen the affordable, accessible health care coverage options that 24 million Americans count on,” said Chris Bond, AHIP’s senior vice president of communications, over email.

Monday’s proposed rule also targets social issues that have been a priority for Trump.

It would allow insurers to stop covering gender-affirming care by removing it from the list of essential health benefits under the ACA, though payers could still elect to cover the services.

The rule would also exclude “Dreamers,” or people who arrived illegally in the U.S. as children, from marketplace coverage, undoing a Biden-era policy that was blocked by a federal judge and is still being litigated.

Once the proposed rule is published in the Federal Register, the public will have 30 days to submit comments.

If finalized, income verification reforms would likely be implemented quickly, while most other changes would become effective for the 2026 plan year. Auto re-enrollment reforms wouldn’t go into effect until the open enrollment period for 2027.