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). Presently, 20 states function SBMs, and two extra are transitioning to this mannequin. In March 2025, the Facilities for Medicare & Medicaid Providers (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 couple of million folks would lose medical insurance.
Though CMS supplied simply 23 days for public touch upon its proposed rule, the company acquired virtually 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 submit 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 components, is accessible 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) Adjustments to open and particular enrollment durations; (2) New $5 premium cost for sure people mechanically re-enrolled; (3) Cancelling subsidies for failure to reconcile the earlier yr’s premium tax credit; (4) Extra documentation necessities for earnings; (5) Adjustments to premium and profit affordability; (6) Eliminating eligibility for DACA recipients; and (7) Protection of therapy for gender dysphoria.
Overarching feedback
Unrealistic Timeline and Added Prices
Some proposed modifications within the rule would take impact instantly and others for plan yr 2026, requiring SBMs to make vital system and operational modifications on a compressed timeline. For plan yr 2026 modifications, the State Market Community notes the proposal permits about three months to make sure “all needed 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 vital sudden prices. New Mexico’s SBM, for instance, is transitioning to a brand new enrollment platform for 2026, a serious operational endeavor, and can be unable to totally adjust to the rule on the timeline proposed as a consequence of finite assets and capability. New York’s SBM makes use of an eligibility system that’s built-in with Medicaid and CHIP, and making modifications to it could “take ten to 12 months to implement and value 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 strategy of setting and submitting charges for 2026. Washington flagged that insurers should submit 2026 fee and type filings by Might 15, 2025, probably earlier than the rule is finalized. The NAIC notes that insurers are unable to set acceptable charges with out figuring out what guidelines will probably be in place and expects “fee will increase to end result from the uncertainty generated by these late rule modifications.”
Throughout a variety of proposed provisions, states usually really useful an extended timeline for required modifications.
Departure from State Flexibility
The proposal makes many modifications for the federally facilitated market (FFM) obligatory for SBMs as effectively. States persistently raised considerations in regards to the rule’s “unprecedented” departure from long-standing flexibility prolonged to SBMs, permitting them to deploy progressive 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 keep up 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 broadly reported that the dealer fraud and improper enrollment points that the proposal seeks to deal with are restricted to the FFM and will not be current in SBMs. They broadly really useful that proposed modifications thus be made elective 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 folks with $0 premiums, and its SBM conducts outreach by way of textual content and electronic mail to all absolutely sponsored shoppers about their enrollment and potential for tax liabilities. Each the Idaho and California SBMs notice 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.
Adjustments to Open and Particular Enrollment Durations
The proposed rule would shorten the annual FFM open enrollment interval (OEP) from 76 to 44 days and eradicate a particular enrollment interval (SEP) that enables low-income people (incomes beneath 150% of the federal poverty stage (FPL) or $23,475 per yr) to enroll any time through the yr. CMS would additionally require folks enrolling within the Market by means of a SEP to submit additional 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 number 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 current consistency” offers no tangible advantages for shoppers.
A number 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 help “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 enhance antagonistic choice, opposite to the proposal’s claims, and a number of other backed their claims up with information. 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 complete medical bills that have been “10 % larger 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 antagonistic choice or improper enrollment. The NAIC believes this “SEP creates some danger of antagonistic choice,” whereas the Colorado SBM argues that its information reveals “youthful, more healthy people make up the big majority of enrollees” who use this SEP, thus “eradicating this SEP would truly hurt the danger pool.”
Whereas Georgia thinks that eradicating this SEP would “scale back the chance for unhealthy actors to commit insurance coverage fraud,” the NAIC does “not imagine that the below 150% SEP is a serious 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 offers. 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 necessary.
Aside 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 keep up current state flexibility in how to make sure the integrity of SEP verifications. Idaho was the one state in our pattern to help the proposed change. It presently verifies 98% of SEPs utilizing a streamlined course of and “a number of types of auto-verification.”
A number of states argued this provision “would end in vital unfunded prices” (New York). For instance, California noticed that as a consequence of “restricted real-time verification information sources,” the proposed change would require extra, unbudgeted employees to conduct “a largely handbook course of.” Colorado estimated that “preliminary expertise prices” to make wanted modifications would exceed $330,000, on prime of elevated employees prices because of the “substantial enhance in workload.”
As well as, a number of states flagged considerations about antagonistic choice. For instance, New York famous that “rising the paperwork burden will probably deter more healthy people from finishing enrollment.” Massachusetts notes that the common age of people that enrolled by means of a SEP “was three years youthful” than all enrollees in 2024, and in California, they’ve averaged almost 6 years youthful than complete enrollees since 2019.
New $5 Premium Cost for Sure People Robotically Re-enrolled
The proposed rule would require Marketplaces to impose a brand new $5 premium on people eligible for a $0 premium, except they actively replace their Market software throughout open enrollment.
Most states that commented on this provision objected to it and/or really useful that it’s made elective for SBMs. Idaho, nevertheless, supported the intention of “requiring absolutely sponsored shoppers to verify their info,” however proposed a special course of that may grant conditional eligibility versus imposing a $5 premium.
States raised considerations that the availability would require expensive system modifications, result in lack of protection, enhance antagonistic choice, and create shopper confusion, all to deal with a supposed drawback that doesn’t exist in SBM states. For instance, New York famous that “there is no such thing as a proof that buyers 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 obstacles to protection and would result in shopper confusion.” New Mexico argued that “these almost definitely to lose protection as a consequence of nominal premiums are more healthy, lower-cost enrollees,” which might “contribute to antagonistic choice, rising premiums and undermining market stability.” Massachusetts commented on the significance of auto-renewal for its protection methods and in “supporting a powerful 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 the 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 earnings, on which the subsidy is initially primarily based, with their precise earnings.
State commenters had combined views on this provision. Georgia referred to as it “commonsense,” and Idaho supported the change as effectively. New Mexico referred to as the change “prudent,” however each New Mexico and Oregon urged an extended lead time to accommodate vital system modifications, employees coaching, and shopper training.
A number of states raised considerations associated to recognized IRS points with this course of. New York notes that the shorter timeframe would create a “vital burden for a lot of shoppers” who’re flagged as failing to reconcile in error, whereas the two-year timeframe “offers a stability between program integrity and administrative burden to shoppers and SBMs.” Colorado argues that the two-year timeframe is acceptable given the “substantial danger of inappropriate lack of [subsidies]” as a consequence of “information high quality limitations within the obtainable IRS information.”
Colorado and Massachusetts reiterated that the broker-fraud justification for this alteration isn’t a difficulty of their states.
Extra Documentation Necessities for Earnings
CMS proposes to require shoppers to submit documentation proving their earnings if third-party information sources recommend their earnings is beneath 100% of the federal poverty stage (FPL). Shoppers would even be required to submit extra documentation proving their earnings if the IRS lacks tax information.
Verification When Knowledge Present Earnings 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 really useful state flexibility. A number of states argued that there is no such thing as a incentive in Medicaid-expansion states for people or brokers to inflate the earnings of an individual below the poverty line with a view to qualify for protection. For instance, Idaho does “not imagine this alteration aligns effectively with expansion-state eligibility thresholds.” As well as, New York commented that the proposal would require Medicaid-expansion states “to expend vital 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 usually objected to its obligatory software in SBM states, with one exception. Idaho usually helps the purpose of requiring extra earnings verification when the IRS lacks tax information, however recommends that CMS permit using state earnings information sources.
New Mexico argued that it’s “affordable” to simply accept self-attestation of earnings when the IRS can’t present info as a result of enrollees should later reconcile their precise earnings at tax time. Massachusetts commented that “people and households mustn’t should expertise burdensome, pointless, and expensive penalties to right for IRS information challenges.” A few states famous that the elevated burden on candidates would enhance antagonistic choice. For instance, Colorado famous that the IRS is much less prone to have tax information for youthful candidates who “usually tend to be deterred” by extra paperwork, but “whose participation within the danger pool helps drive down premiums.” A few states additionally commented on the numerous extra value for programs modifications and employees to course of handbook verifications.
Adjustments to Premium and Profit Affordability
The proposed rule would modify the methodology for figuring out the quantity Market enrollees contribute to their premium. This similar methodology additionally determines the utmost annual out-of-pocket value for folks 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 might enhance by $900 in 2026. Households enrolled within the Market might face a further $313 in premiums. Moreover, CMS proposes to provide insurers extra flexibility to supply plans at every steel stage with decrease actuarial values than permitted below present guidelines.
Not all of the states in our pattern expressed views on these provisions, however those who did expressed considerations about their unfavorable results on shoppers and state markets, and some states registered opposition.
Massachusetts commented that the proposed change in methodology “would enhance premiums and out-of-pocket prices for Massachusetts residents, enhance 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 last actuarial worth calculator and premium adjustment share steerage for Plan 12 months 2026,” and making modifications at this level creates “extra work for states and carriers.” Washington famous that, with the proposed change, “issuers would want 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 “probably the most reasonably priced product available on the market will now not be obtainable.”
States noticed that permitting decrease actuarial worth plans would enhance value sharing for shoppers, make plan comparisons more durable for customers, and enhance antagonistic choice. For instance, New York famous that the change “will end in larger 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 method “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 eradicate 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 considerations. 5 explicitly opposed the change, and three urged CMS to delay it till the tip of the yr whether it is finalized.
States raised considerations with the unfavorable 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 “vital confusion” for shoppers, result in “potential disruptions of medical care,” and “impose a considerable burden” on the SBM. New York commented that modifications to its built-in eligibility system wanted for a mid-year implementation “might value 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 really useful a protected harbor to forestall compensation of subsidies paid “between the efficient date of the rule and the termination of their protection by the related change.”
Pennsylvania opposed the change and noticed that DACA recipients “are usually youthful” and “are usually more healthy,” which “positively advantages the danger pool.”
Protection of Therapy for Gender Dysphoria
The proposed rule would prohibit insurers from masking 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 want 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 present regulatory construction through which 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 provides 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 absolutely insured plans, together with employer plans, of their states should cowl or can’t exclude gender affirming care. Some states pointed to protection by giant, self-insured employers as effectively.
States argued that excluding protection of “medically needed take care of no cause apart from [a person’s] well being situation” (Washington) would violate a variety of state and federal anti-discrimination legal guidelines. Additionally they expressed concern that the proposal would restrict entry to medically needed care really useful by main U.S. medical associations. For instance, Massachusetts famous that the proposal would “considerably elevate [out-of-pocket] prices for folks…curbing their entry to wanted well being care.”
Feedback from California and Washington famous that the handful of current EHB exclusions in federal rule are all “excepted advantages,” these not usually coated by medical insurance coverage, like imaginative and prescient check-ups for adults or nursing residence care. California famous: “CMS’s proposal, for the primary time, would exclude advantages which might be historically embedded inside a well being plan.” As well as, New York flagged that “therapy for gender dysphoria falls into a variety of the EHB classes.”
Word on Our Methodology
This weblog is meant to supply 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 evaluation 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/.