Proposed CMS Changes for ACA Plan Year 2027: A Regulatory Update
In February 2026, the Centers for Medicare & Medicaid Services (CMS) introduced the proposed Notice of Benefit and Payment Parameters (NBPP) for the plan year 2027. This proposal aims to update policies affecting standards and regulatory compliance requirements for qualified health plans (QHPs) on the Affordable Care Act (ACA) Exchange. It also presents significant updates for Exchanges, agents, brokers, and web-brokers, shaping the insurance industry landscape.
The release schedule for the NBPP proposal was altered this year, issued later than usual on February 9, 2026. Typically released over a year before its policies take effect, this year's timeline allows for less preparation time for health plans. With a comment deadline set for March 13, 2026, stakeholders, including payers and providers, might express concerns about meeting upcoming regulatory implementation challenges by mid-April.
Key Elements of the Proposal
Catastrophic Plans: CMS has suggested modifications to cost-sharing arrangements and out-of-pocket limits for catastrophic plans. Changes proposed would increase the out-of-pocket maximum to $15,600 for individuals and over $27,000 for families by 2027. Further, CMS plans to permit issuers to enroll individuals in these plans for up to a decade, diverging from the annual re-enrollment typical under the One Big Beautiful Bill Act (OBBBA).
Non-Network Plans: The NBPP would allow non-network plans to gain QHP status, provided they assure provider accessibility without delays, even without a traditional network. However, the criteria for measuring sufficient access remain unspecified, potentially creating concerns about guaranteeing reliable provider access.
State Exchange Flexibility: CMS proposes granting increased flexibility to State-Based Exchanges (SBEs). Importantly, this includes eliminating the need to first operate as an SBE-FP before transitioning to an independent SBE. The proposal also introduces an SBE-enhanced direct enrollment option utilizing private web-brokers, a revived concept rolled back by the previous administration.
Minimum Loss Ratio (MLR) Standard: While CMS has not proposed specific changes, it seeks feedback on whether adjustments to the MLR standard, which regulates the percentage of premium revenue spent on clinical services, could stabilize the individual market.
Improper Payment Monitoring: To enhance regulatory compliance, CMS aims to strengthen oversight of improper Advance Premium Tax Credit (APTC) payments on SBEs by establishing a measurement program to report improper payment estimates and require corrective actions.
These proposed changes could substantially impact the ACA Exchange landscape, necessitating operational and compliance adjustments across the insurance industry. Stakeholders are expected to provide considerable input during the comment period, with potential modifications anticipated in the final rule. The insurance carrier, underwriting practitioners, and risk management experts will need to brace for potential operational shifts as these regulatory modifications are finalized.