Proposed Rule on ACA Enrollment Changes Raises Cost Concerns

The U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) have released a proposed rule on February 11, 2026. This proposal aims to guide states in preparation for the Affordable Care Act (ACA) open enrollment for the 2027 plan year. The rule suggests significant modifications that could contradict the ACA's mission of expanding health coverage and lowering healthcare costs. The timeframe for public comment is set at 30 days, raising concerns about sufficient time for public input.

Governor Mikie Sherrill voiced concerns that the proposed changes might escalate insurance costs while curtailing coverage. Notably, the elimination of ACA tax credits and changes to Medicaid could adversely affect residents, especially in New Jersey. These developments highlight an evolving landscape in ACA enrollment and coverage, impacting risk management strategies for insurers.

Attorney General Davenport has expressed concerns about the rule's financial implications for states and potential complexity in the enrollment process. He criticized the revival of controversial provisions from previous rules. Similarly, Susan Ochs, Acting Commissioner of the Department of Banking and Insurance, warned of negative impacts on consumer protection and the stability of New Jersey's health insurance marketplace.

The proposed rule comprises updates like new data collection requirements and alterations to health benefit mandates, such as removing adult dental coverage. The expansion of catastrophic plans, with higher out-of-pocket costs, poses financial risks to low-income families, potentially increasing medical bankruptcy rates. These changes could also affect regulatory compliance and carrier pricing strategies.

Potential market dynamics shifts may result from the introduction of multi-year catastrophic plans with variable out-of-pocket maximums, possibly conflicting with ACA protections. Concerns grow over the impact on Bronze-tier ACA plans, with proposed adjustments potentially increasing the risk pool and elevating premium costs, challenging current underwriting practices.

The Attorneys General from various states, including New Jersey, California, and Massachusetts, collectively assert that the proposed changes would lead to higher premiums, operational difficulties, and marketplace instability. They argue that these alterations are arbitrary and unlawful, raising significant concerns about claims processing and payer logistics under the new framework.