With changes to ACA subsidies included in H.R. 1, the healthcare industry could face the biggest change since the passage of the ACA.
Health insurance coverage is likely to be disrupted by changes in ACA marketplace financing, particularly due to the projected reductions in ACA subsidies, as well as the impacts of eligibility and enrollment changes in Medicaid. At a recent HMA webinar, our ACA marketplace experts detailed a number of challenges that health plans participating in the ACA will face in the coming months and years due to these new policies, and some of the thinking behind ways that plans can take action now while Congress debates whether to extend any of the subsidies.
The webinar touched on areas including:
- How the recent policy and funding changes will affect strategic planning, longer term goals, and 2027 plan year rate setting;
- Actuarial analysis/rate setting/risk adjustment insights from HMA’s actuaries;
- Changes likely to occur in plan and marketplace operations in both state exchanges and on the healthcare.gov federal platform;
- The importance of effective communications to avoid creating consumer confusion, and ideas on stakeholder engagement strategies;
- And, how all of this will impact workforce/access to care, and the likelihood of changes to in-network care
The ACA marketplace is bracing for impacts for the 2026 plan year, depending upon potential Congressional actions in the remaining months of 2025. In May 2025, CMS put out a rate filing bulletin for plan year 2026 that gave technical directions for submissions and urging states and issuers to be prepared to react to Congressional action. This was a signal that the administration anticipated potential policy changes between May when they put this out and the rate filing window in the fall.
This is reminiscent of the ACA changes that happened in 2017, when there was litigation around cost-sharing reduction (CSR) subsidies that needed to be appropriated. (This was during the “repeal and replace” debate in Congress, in that same July-August timeframe.) When repeal efforts failed in Congress, the Administration decided not to pay CSRs, necessitating a bipartisan agreement to address this new financing issue. Changes to CSRs were dropped from this year’s law but could be addressed before the end of the year in upcoming appropriations bills in Congress.
“ACA plan strategies need to change to ensure that they are considering different outcomes in the market composition and competitor changes to pricing strategies. Expect more policy changes and potential for market churn, making pricing difficult in 2027 given the limited information on what happens in 2026.” – Michelle Anderson
A recent Wakely report analyzing the early draft of HR 1 before passage (Future of the Individual Market: Impact of the House Reconciliation Bill and Other Changes on the ACA Individual Market) details estimated reductions in the individual market enrollment with potential reduction anywhere from 47 to 57% or 11.2 to 13.6 million enrollment enrollees by 2028. The attrition estimates include the loss of both federally subsidized individuals, as well as the unsubsidized due to premium increases. This paper was quoted in a recent NY Times piece, “Why Obamacare Bills May Double Next Year”.
“Changes are coming for Healthcare.gov and state marketplace consumers in 2026. The (likely) expiring enhanced premium tax credits, as well as provisions within HR 1 and the Marketplace Integrity and Affordability rule will all be rolled out to marketplace consumers this coming Open Enrollment. In addition to the marketplaces, state departments of insurance, issuers, enrollment assistance professionals, and other stakeholders will play a critical role in helping consumers navigate the coming eligibility and affordability changes.” – Zach Sherman
Impacted marketplace consumers need to be made aware of these coming changes. States and issuers should undertake a broad, aggressive, and coordinated communication effort around the overall rate changes. Ensuring consumers understand how their net premium is changing due to expiring enhanced premium tax credits as well as the other operational changes will be crucial to their ability to stay covered. We expect to see considerable consumer plan switching this coming open enrollment as a result. Some consumers may need to buy-down to silver or bronze plans to be able to afford to maintain their coverage. Marketplaces will need to ramp up customer service and navigation support. States with reinsurance programs or premium subsidies should consider ramping up funding to mitigate the affordability gaps that are likely to occur.
“It’s really important for folks in the ACA marketplace community to be active when it comes to policymaking and advocacy.” – Liz Wroe
These issues are part of the government funding debates underway right now as a government shutdown looms. Depending upon the outcome with the September funding deadline, or the possibility of a supplemental funding bill this year, these ACA marketplace issues could be addressed in several sets of negotiations. Now is the time to talk to your state officials, insurance commissioners, associations and contacts in the Federal government to ensure they have a good understanding of how these ACA marketplace changes will impact coverage in your state.
To hear the full discussion, you can find the replay and materials for the ACA webinar here, and download the full Wakely paper at Future of the Individual Market: Impact of the House Reconciliation Bill and Other Changes on the ACA Individual Market.
