Below are some key changes to the Marketplace from the proposed rule and the Energy and Commerce legislation:
- Shortens the Open Enrollment Period: In the past few years, the annual open enrollment period has lasted from November 1 to January 15, with some state-based exchanges having longer enrollment periods; the proposed rule and the legislation would end the open enrollment period a month earlier, on December 15.
- Restricts the types of Special Enrollment Periods (SEPs): The proposed rule eliminates the year-round enrollment opportunity for people with incomes up to 150% of poverty (the low-income SEP). SEPs allow individuals to enroll in Marketplaces outside the annual open enrollment period. The legislation would go further than the proposed rule by limiting the ability of all Marketplaces (including SBMs) to provide specific types of SEPs, such as the low-income SEP, that are based on the relationship of people’s income to the poverty line.
- Creates a new $5 monthly charge for certain auto-enrollees: Under the proposed rule, enrollees with a zero-dollar premium (after tax credits) who are automatically re-enrolled in Marketplace coverage and do not proactively verify their ongoing eligibility for a fully subsidized plan will face a $5 monthly charge until they actively confirm their eligibility. Legislation includes the same requirement, described as a reduction in advance payment of premium tax credits.
- Imposes new documentation requirement for individuals to verify income in specific situations when applying for premium tax credits. The proposed rule and legislation would require individuals to verify their projected income by providing additional documentation where the Internal Revenue Services has no tax return data for the individual for the prior year. Documentation would also be required where IRS data indicates that an applicant’s income for the prior year was below the poverty level.
Expiration of Enhanced Tax Credits
The CBO projects that 4.2 million more people will be uninsured in 2038 if enhanced ACA tax credit expire. The enhanced premium tax credits were originally passed by Congress in the
American Rescue Plan Act (ARPA) and extended under the
Inflation Reduction Act (IRA), but they are set to expire at the end of 2025. The enhanced tax credits both increased the amount of financial help for those already eligible under the ACA and expanded eligibility to those making more than four times poverty (
$124,800 for a family of four in 2025). On average, the enhanced tax credits have reduced premium payments by
$705 a year on average for enrollees receiving tax credits.
The enhanced premium tax credits have led to the ACA Marketplace more than
doubling in size since 2020. States that President Trump won
account for 88% of Marketplace enrollment growth since 2020. In some of these states, such as Florida, Texas, and Georgia, at least 10% of the
population in a majority of congressional districts is now enrolled in a Marketplace plan.
The expiration of the enhanced tax credits is expected to cause ACA enrollees’ out-of-pocket premium payments to increase by over
75% on average, with people in some states seeing their payments more than
double on average.
Lower-income and
older enrollees, as well those who live in states that have
not expanded Medicaid, are expected to see the most significant premium payment increases.
