On May 18, the House Budget Committee advanced a budget reconciliation bill that includes significant changes to the Medicaid program and the Affordable Care Act, as well as additional provisions related to Medicare and Health Savings Accounts. The following includes a summary of the health provisions included in the House Rules Committee Print released on May 19 compared to current law.
| Verifying personal information (W&M) | Enrollees only have to attest their information to enroll in a Marketplace plan. After enrollment, there is electronic verification against Internal Revenue Service, Social Security Administration, Department of Homeland Security, and state Medicaid databases. Enrollees are granted conditional eligibility if there is a mismatch in their information provided and federal databases. Enrollees can retain coverage and tax credits for up to 90 days while submitting verification documents. Enrollees who take no action during open enrollment are auto-renewed into the same or similar plan. Nearly half of Marketplace enrollees in 2025 auto-renewed. | · Requires that income, immigration status, health coverage status, place of residence, family size, and any other information that the Secretary of Health and Human Services deems necessary are verified before coverage. Consumers can still enroll in a plan, but cannot receive premium tax credits or cost-sharing reductions (CSRs) until after they verify their eligibility.
· This provision effectively ends auto-renewals. Effective date: taxable years beginning after December 31, 2027 |
FAQs: Health Insurance Marketplace and the ACA
State Health Facts: Affordable Care Act Signing Up for Marketplace Coverage remains a Challenge for Many Consumers |
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| Verifying personal information (E&C) | Enrollees only have to attest their information to enroll in a Marketplace plan, but there is electronic verification against Internal Revenue Service, Social Security Administration, Department of Homeland Security, and state Medicaid databases. Enrollees are granted conditional eligibility if there is a mismatch in their information provided and federal databases. Enrollees can retain coverage and tax credits for up to 90 days while submitting verification documents. | · In cases where household income or family size data are not available with the Treasury Department, enrollees will need to provide additional documentation and can no longer simply self-attest to changes of household income and family size
· Creates new triggers for full income verification by the Exchange, when all of the following are true: 1) an individual attests to being subsidy eligible, 2) government and third-party data suggests an individual’s income is lower than would be needed to qualify for a subsidy, 3) the individual is not eligible for Medicaid · Removes an automatic extension of 90 days for an enrollee to verify their household income Effective date: plan years on or after January 1, 2026 |
FAQs: Health Insurance Marketplace and the ACA
State Health Facts: Affordable Care Act Signing Up for Marketplace Coverage remains a Challenge for Many Consumers |
| Special Enrollment Periods (SEPs) and tax credit eligibility (W&M) | In addition to qualifying life events (QLEs) that enable eligibility for an SEP, people in states that use Federally-Facilitated Marketplaces (FFM) and make no more than 150% of the federal poverty level can apply for a year-round SEP to sign up for coverage. Some state-based exchanges also offer SEPs that are based on the relationship of people’s income to the poverty line. Any person who enrolls in a plan via an SEP is eligible for both premium tax credits and cost-sharing reductions (CSRs). In 2025, enrollees with an income of less than 150% of the federal poverty line made up the largest share of all Marketplace enrollees (47%). | · Ends low-income SEPs. Bars any consumer who enrolls in a plan via a non-QLE SEP from receiving either premium tax credits or CSRs.
Effective date: The third full calendar month following the date the bill is enacted. |
FAQs: Health Insurance Marketplace and the ACA
State Health Facts: Affordable Care Act Explaining Health Care Reform: Questions About Health Insurance Subsidies |
| Special Enrollment Periods (SEPs) (E&C) | In addition to qualifying life events (QLEs) that enable eligibility for an SEP, people in states that use Federally-Facilitated Marketplaces (FFM) and make no more than 150% of the federal poverty level can apply for a year-round SEP to sign up for coverage. Some state-based marketplaces (SBMs) also offer SEPs that are based on the relationship of people’s income to the poverty line. In 2025, about half (47%) of Marketplace enrollees had an income of less than 150% of the federal poverty line. | · Eliminates the year-round enrollment opportunity for people with incomes up to 150% of poverty (low-income SEP).
· Limits the ability of all Marketplaces (including SBMs) to provide specific types of SEPs that are based on the relationship of people’s income to the poverty line. · Requires enrollees prove eligibility to enroll before enrolling. Effective Date: plan years on or after January 1, 2026 |
FAQs: Health Insurance Marketplace and the ACA |
| Recapture of excess premium tax credits | Currently, if an enrollee receives excess premium tax credits because their estimated income was lower than their actual income, they must repay the excess. However, for most enrollees, there is a repayment cap that varies based on household income. For enrollees with household incomes over 400% of the federal poverty level (FPL), there is no limit. They must repay the entirety of their excess tax credit. Other repayment limits vary from $375 for a single person with an income that is less than 200% FPL to $3,150 for families with an income between 300%-400% FPL. | · Requires that all premium tax credit recipients repay the full amount of any excess, no matter their income.
Effective date: taxable years beginning after December 31, 2025 |
Explaining Health Care Reform: Questions About Health Insurance Subsidies |
| Prohibits coverage of gender affirming care as an essential health benefit | The ACA does not exclude or require gender affirming care as an essential health benefit. | · Amends the ACA to prohibit “coverage of gender transition procedures,” including puberty blockers, hormone treatment, and surgery, as an essential health benefit (EHB) beginning on or after January 1, 2027.
· Despite headline referencing marketplaces, could apply to other plans subject to EHB requirements (e.g. non-grandfathered individual and small group plans off the marketplaces and Alternative Benefit Plans (impacting Medicaid expansion adults). |
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| Premium underpayments and effectuation of coverage | Consumers can still have their coverage effectuated if at least 95% of their first premium payment is paid. Additionally, in a given month, insurers consider enrollees to have full paid their full premium if they’ve paid at least 98% of their premium or have an unpaid remainder of $10 or less. Additionally, insurers cannot deny coverage even if an individual has failed to pay premiums associated with an old policy. | · Permits insurers to require enrollees pay the full amount of their first month’s premium to have their coverage effectuated.
· Permits insurers to require the full premium to be paid in a given month to retain coverage. · Permits insurers to require payment for the first month’s premium, as well as any unpaid, past-due premiums before effectuating coverage. Effective date: plan years beginning on or after January 1, 2026 |
Explaining Health Care Reform: Questions About Health Insurance Subsidies |
| Premium adjustment percentage (PAP) methodology | The PAP is the percentage that the average employer-sponsored insurance (ESI) per capita premium for the previous calendar year exceeds the average per capita premium for 2013. The PAP is used to index the maximum annual limitation on cost-sharing, employer mandate penalties, and income thresholds for some affordability exemptions. In 2025, the maximum annual limitation on cost-sharing was $9,200 for individuals and $18,400 for families. | · Reverts the PAP methodology to that of 2019. The 2019 methodology uses individual market premiums to index these measures, which causes the PAP to grow more slowly and pass more cost-sharing onto the consumer over time.
Effective date: calendar years beginning January 1, 2026 |
Explaining Health Care Reform: Questions About Health Insurance Subsidies |
| Open Enrollment Period (OEP) | In most states, open enrollment lasts from November 1 to January 15. Some state-based exchanges have longer enrollment periods. In 2025, about 40% of enrollees or 10 million people selected plans after December 15. | · End OEP a month earlier, on December 15
Effective Date: Plan years beginning January 1, 2026 (Open enrollment beginning November 1, 2025) |
FAQs: Health Insurance Marketplace and the ACA |
| Filing and reconciling | Enrollees who receive any amount of premium tax credits must file and reconcile their premium tax credits every two years. Failure to do so will lead to ineligibility for premium tax credits. In 2025, about 92% of Marketplace enrollees or over 22 million people received premium tax credits. | · Enrollees who have received any amount of premium tax credit must file and reconcile their premium tax credits on an annual basis. Failure to do so will lead to ineligibility for premium tax credits.
Effective Date: plan years on or after January 1, 2026 |
FAQs: Health Insurance Marketplace and the ACA |
| Employer credit for CHOICE arrangements | There is no specific federal tax credit for small employers offering ICHRAs. | · Introduces a tax credit for small employers offering CHOICE arrangements, providing a $100 per month credit for the first year and half that amount for the second year of employee enrollment. This credit is available to employers who are not large employers and who provide a custom health option and individual care expense arrangement that meets minimum essential coverage requirements.
Effective date: taxable years beginning after December 31, 2025 |
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| CHOICE arrangements | The Individual Coverage Health Reimbursement Arrangement (ICHRA) was created in 2019 via rulemaking by the first Trump Administration. ICHRA allows employers to reimburse employees, on a pre-tax basis, for all or a portion of their health insurance premiums in the individual market. However, employees with an ICHRA can only use pre-tax dollars via a Section 125 cafeteria plan to pay for off-Exchange individual market plans, not for on-Exchange (ACA Marketplace) plans | · Codifies much of the 2019 Trump Administration rule that created ICHRAs
· Allows employees with an ICHRA to use pre-tax dollars through a cafeteria plan to pay for on-Exchange ACA Marketplace premiums. Effective date: taxable years beginning after December 31, 2025 |
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| Automatic reenrollment | Insurers are not typically allowed to automatically re-enroll consumers in different plans than what they initially are enrolled in. However, an insurer is allowed to enroll a consumer who initially was enrolled in a bronze plan in a silver plan if they qualify for cost-sharing reductions (CSRs) (have an income between 100%-250% of the federal poverty line) and could be missing out on significant cost-sharing help. In 2025, 45% of all Marketplace enrollees or over 10 million people were automatically reenrolled in their plan or a similar plan from the previous year. | · Discontinues the practice of automatically reenrolling individuals eligible for CSRs who were in a bronze level plan into a silver plan to receive CSRs.
· Requires enrollees with a zero-dollar premium (after tax credits) who are automatically reenrolled in Marketplace coverage to proactively verify their ongoing eligibility for fully subsidized plan or face a $5 monthly charge (reduction in their tax credits) until they actively confirm their eligibility. · Note that a different provision (pre-enrollment verification, described above) effectively ends auto-reenrollment altogether (regardless of metal level) Effective date: plan years beginning on or after January 1, 2026 |
FAQs: Health Insurance Marketplace and the ACA |
| Actuarial value (AV) | The allowable variation of AV of a health plan is +/- 2 percentage points to be considered a certain metal level (except for silver plans, which have a 0/+2 de minimis range). For example, a bronze plan is a health plan with an AV of 60%, so any plan with an AV ranging between 58% and 62% is also considered a bronze plan. In 2024, the average medical deductible in plans with combine medical and prescription drug deductibles was $7,258 for bronze plans and $5,241 for silver plans. Increasing the lower range of allowable actuarial value variation decreases deductibles and cost-sharing at each metal level. | · Reverts allowable variation in actuarial value back to variation allowed in plan year 2022, which ranges between -4 percentage points and +2 percentage points. For example, a bronze plan is a health plan with an AV of 60%, so any plan with an AV ranging between 56% and 62% is also considered a bronze plan.
· The de minimis variation in actuarial value for silver plans is now +/- 1 percentage point. Effective date: plan years beginning on or after January 1, 2026 |
Deductibles in ACA Marketplace Plans, 2014-2024
State Health Facts: Affordable Care Act Explaining Health Care Reform: Questions About Health Insurance Subsidies Standardized Plans in the Health Care Marketplace: Changing Requirements |
| ACA Marketplace coverage eligibility for lawfully present immigrants | Under current law, U.S. citizens and lawfully present immigrants are eligible to enroll in ACA Marketplace coverage and receive premium subsidies and cost-sharing reductions. Lawfully present immigrants with incomes under 100% of the federal poverty level (FPL) who do not qualify for Medicaid coverage due to their immigration status also are eligible for ACA Marketplace coverage. | · Limits eligibility for subsidized ACA Marketplace coverage to lawfully present immigrants who are lawful permanent residents (LPRs or “green card” holders), Compact of Free Association (COFA) migrants residing in the U.S., or certain immigrants from Cuba, eliminating eligibility for many lawfully present immigrants including refugees, asylees, and people with Temporary Protected Status beginning January 1, 2027.
· Eliminates Marketplace eligibility for all lawfully present immigrants with incomes under 100% of the FPL. Effective date: beginning January 1, 2026 |
Potential Impacts of 2025 Budget Reconciliation on Health Coverage for Immigrant Families |
| ACA Marketplace coverage eligibility for Deferred Action for Childhood Arrivals (DACA) recipients | Following new regulations published by the Biden administration in May 2024 making DACA recipients be considered “lawfully present” for the purposes of health coverage, DACA recipients in 31 states plus DC are currently eligible to enroll in Marketplace coverage and receive premium subsidies and cost-sharing reductions. | · Updates legislation to make DACA recipients in all states ineligible to purchase ACA Marketplace coverage by excluding them from the definition of “lawfully present.”
Effective date: January 1, 2026 |
Potential Impacts of 2025 Budget Reconciliation on Health Coverage for Immigrant Families
Overview and Implications of the ACA Marketplace Expansion to DACA Recipients |
Source: https://www.kff.org/tracking-the-affordable-care-act-provisions-in-the-2025-budget-bill/
