This yr, enrollment within the Inexpensive Care Act (ACA) Marketplaces is at an all-time excessive, hitting 24.3 million throughout the latest open enrollment season. The ACA permits states to make use of HealthCare.gov or set up their very own state-based Market (SBMs). At present, 20 states function SBMs, and two extra are transitioning to this mannequin. In March 2025, the Facilities for Medicare & Medicaid Companies (CMS) launched a set of proposals that may change Market advantages, enrollment, and eligibility guidelines such that, by its personal estimates, between 750,000 and a pair of million individuals would lose medical insurance.
Though CMS supplied simply 23 days for public touch upon its proposed rule, the company acquired nearly 26,000 feedback. CHIR reviewed a pattern of feedback from 4 main classes of stakeholders to higher perceive how completely different teams view the administration’s proposals and the way they could be impacted. The primary two blogs in our collection summarized feedback from well being plans and brokers and suppliers. An upcoming put up will give attention to feedback from shopper and affected person organizations. This third weblog in our collection examines feedback submitted by state departments of insurance coverage (DOIs), state-based marketplaces (SBMs), and their consultant associations (referred to collectively right here as “states”). Particularly, we reviewed feedback from:
Nationwide Affiliation of Insurance coverage Commissioners (NAIC)
The proposed Market rule covers a variety of insurance policies (an in depth abstract of its provisions, in two elements, is offered on Well being Affairs Forefront right here and right here). This abstract of suggestions from state-based Marketplaces and departments of insurance coverage focuses on overarching feedback from states adopted by feedback on the next chosen CMS proposals: (1) Modifications to open and particular enrollment durations; (2) New $5 premium cost for sure people routinely re-enrolled; (3) Cancelling subsidies for failure to reconcile the earlier yr’s premium tax credit; (4) Further documentation necessities for revenue; (5) Modifications to premium and profit affordability; (6) Eliminating eligibility for DACA recipients; and (7) Protection of remedy for gender dysphoria.
Overarching feedback
Unrealistic Timeline and Added Prices
Some proposed adjustments within the rule would take impact instantly and others for plan yr 2026, requiring SBMs to make important system and operational adjustments on a compressed timeline. For plan yr 2026 adjustments, the State Market Community notes the proposal permits about three months to make sure “all crucial system updates are accomplished by August, on the newest, when a number of SBMs start processing their first batch of renewals and notices.” Some states famous that the expedited timeline is “unworkable” for SBMs or would add important surprising prices. New Mexico’s SBM, for instance, is transitioning to a brand new enrollment platform for 2026, a significant operational enterprise, and can be unable to totally adjust to the rule on the timeline proposed resulting from finite assets and capability. New York’s SBM makes use of an eligibility system that’s built-in with Medicaid and CHIP, and making adjustments to it will probably “take ten to 12 months to implement and price as much as $1 million.”
Some states additionally expressed concern in regards to the proposal’s timeline on condition that insurers are presently within the technique of setting and submitting charges for 2026. Washington flagged that insurers should submit 2026 fee and type filings by Might 15, 2025, doubtless earlier than the rule is finalized. The NAIC notes that insurers are unable to set applicable charges with out understanding what guidelines will likely be in place and expects “fee will increase to end result from the uncertainty generated by these late rule adjustments.”
Throughout a variety of proposed provisions, states typically beneficial an extended timeline for required adjustments.
Departure from State Flexibility
The proposal makes many adjustments for the federally facilitated market (FFM) obligatory for SBMs as properly. States constantly raised issues in regards to the rule’s “unprecedented” departure from long-standing flexibility prolonged to SBMs, permitting them to deploy modern approaches that serve their distinctive markets and populations, so long as they adhered to federal flooring. The State Market Community “encourages continued recognition of state authority over markets and marketplaces,” and notes that one-size-fits-all approaches “danger destabilizing markets, rising inefficiencies, and rising shopper prices.” The NAIC objects to the rule’s many “limits to state authority.”
Throughout a variety of proposed provisions, states roundly urged CMS to take care of long-standing flexibility for SBMs.
Lack of Enrollment-Associated Fraud in SBMs
Many states questioned a key justification of the proposal because it pertains to SBMs. States extensively reported that the dealer fraud and improper enrollment points that the proposal seeks to deal with are restricted to the FFM and aren’t current in SBMs. They extensively beneficial that proposed adjustments thus be made optionally available for SBMs. A number of described “sturdy” actions to make sure program integrity, mitigate fraud, and safeguard taxpayer {dollars}. For instance, Idaho requires insurers to ship a month-to-month bill to shoppers, even to individuals with $0 premiums, and its SBM conducts outreach by way of textual content and electronic mail to all totally backed shoppers about their enrollment and potential for tax liabilities. Each the Idaho and California SBMs word that solely a shopper can provoke a web based motion so as to add an agent to their account. The Massachusetts SBM doesn’t use brokers or web-brokers for enrollment.
Modifications to Open and Particular Enrollment Intervals
The proposed rule would shorten the annual FFM open enrollment interval (OEP) from 76 to 44 days and remove a particular enrollment interval (SEP) that permits low-income people (incomes beneath 150% of the federal poverty stage (FPL) or $23,475 per yr) to enroll any time in the course of the yr. CMS would additionally require individuals enrolling within the Market by a SEP to submit further paperwork. In a departure from previous observe, CMS would require SBMs to stick to the federally set OEP timeline and SEP insurance policies.
Shortening OEP
States roundly oppose making use of the shortened OEP to SBMs. Feedback from Georgia emphasised the significance of flexibility “to answer state-specific wants,” and famous that the state prolonged its 2025 OEP in response to 2 hurricanes. A couple of SBMs expressed concern about shopper confusion, noting the size of time their state-specific OEP had been in place, for instance, “for over ten years” in California, and “since 2016” in New York. The NAIC notes that “requiring SMBs to desert present consistency” supplies no tangible advantages for shoppers.
A couple of states famous that the shorter timeframe would place a “substantial burden” on SBM name facilities in addition to brokers and brokers. For instance, Colorado notes brokers and brokers must attempt to assist “the identical quantity of enrollees throughout a truncated timeframe that overlaps” with enrollment in different protection, like Medicare. Lastly, many states argued that shortening the OEP would improve hostile choice, opposite to the proposal’s claims, and several other backed their claims up with knowledge. For instance, in Massachusetts, simply over half of enrollees enroll after December 15. Individuals who enrolled by December 15 have been older on common and had whole medical bills that have been “10 % greater in comparison with individuals who shopped after December 15.”
Eliminating the Low-income SEP
State commenters in our pattern differed on whether or not the low-income SEP contributes to hostile choice or improper enrollment. The NAIC believes this “SEP creates some danger of hostile choice,” whereas the Colorado SBM argues that its knowledge exhibits “youthful, more healthy people make up the massive majority of enrollees” who use this SEP, thus “eradicating this SEP would really hurt the danger pool.”
Whereas Georgia thinks that eradicating this SEP would “cut back the chance for unhealthy actors to commit insurance coverage fraud,” the NAIC does “not consider that the beneath 150% SEP is a significant contributor” to improper enrollment. New Mexico sees no proof that this SEP is misused and cites its personal monetary stake within the correct administration of this SEP given the extra state-funded subsidies it supplies. As well as, New Mexico famous that 59% of enrollees who used this SEP in 2024 lived in rural or frontier counties, the place lowering uncompensated care to suppliers is essential.
Apart from Georgia, states in our pattern that commented on this provision advocate that SBMs keep the choice to supply this SEP.
Pre-enrollment Verification for SEPs
Most states in our pattern that supplied feedback on this provision urged CMS to take care of present state flexibility in how to make sure the integrity of SEP verifications. Idaho was the one state in our pattern to assist the proposed change. It presently verifies 98% of SEPs utilizing a streamlined course of and “a number of types of auto-verification.”
A couple of states argued this provision “would lead to important unfunded prices” (New York). For instance, California noticed that resulting from “restricted real-time verification knowledge sources,” the proposed change would require further, unbudgeted workers to conduct “a largely handbook course of.” Colorado estimated that “preliminary know-how prices” to make wanted adjustments would exceed $330,000, on prime of elevated workers prices because of the “substantial improve in workload.”
As well as, a couple of states flagged issues about hostile choice. For instance, New York famous that “rising the paperwork burden will doubtless deter more healthy people from finishing enrollment.” Massachusetts notes that the common age of people that enrolled by a SEP “was three years youthful” than all enrollees in 2024, and in California, they’ve averaged practically 6 years youthful than whole enrollees since 2019.
New $5 Premium Cost for Sure People Routinely Re-enrolled
The proposed rule would require Marketplaces to impose a brand new $5 premium on people eligible for a $0 premium, until they actively replace their Market software throughout open enrollment.
Most states that commented on this provision objected to it and/or beneficial that or not it’s made optionally available for SBMs. Idaho, nonetheless, supported the goal of “requiring totally backed shoppers to verify their info,” however proposed a unique course of that may grant conditional eligibility versus imposing a $5 premium.
States raised issues that the supply would require pricey system adjustments, result in lack of protection, improve hostile choice, and create shopper confusion, all to deal with a supposed downside that doesn’t exist in SBM states. For instance, New York famous that “there isn’t a proof that customers in New York have been fraudulently enrolled in $0 plans.” Pennsylvania commented that “forcing an arbitrary five-dollar penalty solely on low-income people unnecessarily will increase boundaries to protection and would result in shopper confusion.” New Mexico argued that “these probably to lose protection resulting from nominal premiums are more healthy, lower-cost enrollees,” which may “contribute to hostile choice, rising premiums and undermining market stability.” Massachusetts commented on the significance of auto-renewal for its protection methods and in “supporting a robust merged market danger pool.”
A few states questioned whether or not the change was legally permissible. Oregon, for instance, “questions the authorized authority for HHS’s proposal to withhold any quantity of [premium subsidy] paid on behalf of a taxpayer who has been decided legally entitled to your complete [subsidy] quantity.”
Cancelling Subsidies for Failure to Reconcile
The proposed rule would require the Market to finish subsidies sooner—after one yr, not two—for enrollees who fail to file their taxes and reconcile their estimated revenue, on which the subsidy is initially primarily based, with their precise revenue.
State commenters had blended views on this provision. Georgia referred to as it “commonsense,” and Idaho supported the change as properly. New Mexico referred to as the change “prudent,” however each New Mexico and Oregon urged an extended lead time to accommodate important system adjustments, workers coaching, and shopper training.
A couple of states raised issues associated to recognized IRS points with this course of. New York notes that the shorter timeframe would create a “important burden for a lot of shoppers” who’re flagged as failing to reconcile in error, whereas the two-year timeframe “supplies a steadiness between program integrity and administrative burden to shoppers and SBMs.” Colorado argues that the two-year timeframe is suitable given the “substantial danger of inappropriate lack of [subsidies]” resulting from “knowledge high quality limitations within the obtainable IRS data.”
Colorado and Massachusetts reiterated that the broker-fraud justification for this modification isn’t a difficulty of their states.
Further Documentation Necessities for Revenue
CMS proposes to require shoppers to submit documentation proving their revenue if third-party knowledge sources recommend their revenue is beneath one hundred pc of the federal poverty stage (FPL). Customers would even be required to submit further documentation proving their revenue if the IRS lacks tax knowledge.
Verification When Knowledge Present Revenue Beneath the Poverty Line
States in our pattern that commented on this provision uniformly questioned the rationale for making use of it to states which have expanded Medicaid and beneficial state flexibility. A number of states argued that there isn’t a incentive in Medicaid-expansion states for people or brokers to inflate the revenue of an individual beneath the poverty line with the intention to qualify for protection. For instance, Idaho does “not consider this modification aligns properly with expansion-state eligibility thresholds.” As well as, New York commented that the proposal would require Medicaid-expansion states “to expend important IT system and Buyer Service Middle prices, with out altering ensuing shopper eligibility.”
New Documentation When IRS Knowledge is Unavailable
States in our pattern that commented on this provision typically objected to its obligatory software in SBM states, with one exception. Idaho typically helps the aim of requiring further revenue verification when the IRS lacks tax knowledge, however recommends that CMS enable the usage of state revenue knowledge sources.
New Mexico argued that it’s “cheap” to just accept self-attestation of revenue when the IRS can not present info as a result of enrollees should later reconcile their precise revenue at tax time. Massachusetts commented that “people and households shouldn’t should expertise burdensome, pointless, and expensive penalties to right for IRS knowledge challenges.” A few states famous that the elevated burden on candidates would improve hostile choice. For instance, Colorado famous that the IRS is much less prone to have tax knowledge for youthful candidates who “usually tend to be deterred” by further paperwork, but “whose participation within the danger pool helps drive down premiums.” A few states additionally commented on the numerous further price for techniques adjustments and workers to course of handbook verifications.
Modifications to Premium and Profit Affordability
The proposed rule would alter the methodology for figuring out the quantity Market enrollees contribute to their premium. This similar methodology additionally determines the utmost annual out-of-pocket price for individuals in each particular person and group market well being plans, together with employer-based protection. If finalized as proposed, deductibles and different cost-sharing for the everyday household may improve by $900 in 2026. Households enrolled within the Market may face a further $313 in premiums. Moreover, CMS proposes to offer insurers extra flexibility to supply plans at every steel stage with decrease actuarial values than permitted beneath present guidelines.
Not all of the states in our pattern expressed views on these provisions, however those who did expressed issues about their damaging results on shoppers and state markets, and some states registered opposition.
Massachusetts commented that the proposed change in methodology “would improve premiums and out-of-pocket prices for Massachusetts residents, improve state prices, result in protection loss, and hurt our danger pool, additional exacerbating premium will increase for all.” Oregon commented that the proposal would exacerbate the “premium shock” shoppers will face if enhanced subsidies expire on the finish of the yr and additional “destabilize the person insurance coverage market.”
States additionally raised operational challenges because of the timing of the proposed methodology change. Oregon famous that CMS had “already launched a remaining actuarial worth calculator and premium adjustment share steerage for Plan 12 months 2026,” and making adjustments at this level creates “further work for states and carriers.” Washington famous that, with the proposed change, “issuers would wish to develop charges utilizing new assumptions,” because of the state by Might 15. It additional flagged that, given the late timing of the methodology change for 2026 protection, insurers are unlikely to supply any catastrophic well being plans in Washington subsequent yr, so “essentially the most inexpensive product available on the market will not be obtainable.”
States noticed that permitting decrease actuarial worth plans would improve price sharing for shoppers, make plan comparisons tougher for buyers, and improve hostile choice. For instance, New York famous that the change “will lead to greater deductibles, copayments, and different cost-sharing whereas rising well being care prices proceed to be a major concern for households.” Oregon famous that the present strategy “permits for a way more efficient ‘apples-to-apples’ comparability of the protection supplied at completely different steel tiers.”
Eliminating Eligibility for DACA Recipients
The proposed rule would remove Market and Fundamental Well being Program eligibility for Deferred Motion for Childhood Arrival (DACA) recipients, reversing a rule change made final yr. The proposed change would take impact instantly, upon the ultimate rule’s efficient date.
All seven states in our pattern that commented on the DACA eligibility change raised issues. 5 explicitly opposed the change, and three urged CMS to delay it till the tip of the yr whether it is finalized.
States raised issues with the damaging impacts on shoppers, their markets, and SBM operations, that are exacerbated by the mid-year efficient date. Colorado famous that the mid-year change would trigger “important confusion” for shoppers, result in “potential disruptions of medical care,” and “impose a considerable burden” on the SBM. New York commented that adjustments to its built-in eligibility system wanted for a mid-year implementation “may price as much as $1 million.”
Oregon commented that SBMs will “want a while to operationalize this proposal and take away DACA recipients from their rolls as a result of it’s unclear how state exchanges can decide the DACA standing of any explicit particular person.” The state beneficial a protected harbor to stop compensation of subsidies paid “between the efficient date of the rule and the termination of their protection by the related alternate.”
Pennsylvania opposed the change and noticed that DACA recipients “are typically youthful” and “are typically more healthy,” which “positively advantages the danger pool.”
Protection of Therapy for Gender Dysphoria
The proposed rule would prohibit insurers from protecting gadgets and companies that deal with gender dysphoria (referred to within the rule as “intercourse trait modification”) as a part of important well being advantages (EHBs). States would nonetheless be permitted to mandate such protection, however would wish to defray the prices of such protection utilizing state funds.
5 states in our pattern expressed views on this provision, and all urged CMS to protect the prevailing regulatory construction wherein states have flexibility to find out important well being advantages, inside broad federal guardrails. Washington commented that the proposal “contravenes a core tenet of ACA implementation, which supplies states the authority to designate their EHB benchmark plan.” It additional argued that the usual required of EHBs “relies on the advantages supplied by a typical employer plan in a given state.” California, New York, Oregon, and Washington identified that each one totally insured plans, together with employer plans, of their states should cowl or can not exclude gender affirming care. Some states pointed to protection by giant, self-insured employers as properly.
States argued that excluding protection of “medically crucial take care of no purpose apart from [a person’s] well being situation” (Washington) would violate a variety of state and federal anti-discrimination legal guidelines. In addition they expressed concern that the proposal would restrict entry to medically crucial care beneficial by main U.S. medical associations. For instance, Massachusetts famous that the proposal would “considerably increase [out-of-pocket] prices for individuals…curbing their entry to wanted well being care.”
Feedback from California and Washington famous that the handful of present EHB exclusions in federal rule are all “excepted advantages,” these not typically coated by medical insurance coverage, like imaginative and prescient check-ups for adults or nursing house care. California famous: “CMS’s proposal, for the primary time, would exclude advantages which can be historically embedded inside a well being plan.” As well as, New York flagged that “remedy for gender dysphoria falls into quite a lot of the EHB classes.”
Word on Our Methodology
This weblog is meant to offer a abstract of feedback submitted by state departments of insurance coverage, state-based marketplaces, and consultant associations. This isn’t meant to be a complete assessment of all feedback on each provision within the proposed rule, nor does it seize each element of the reviewed feedback. To view extra stakeholder feedback, please go to https://www.laws.gov/.
