CMS proposes 2027 ACA marketplace changes to address rising premiums

With few signs of pending relief for increased premiums in the Affordable Care Act (ACA) insurance marketplaces, CMS issued proposals designed to solidify the affordability and availability of coverage next year.

In recent weeks, the Senate has made little or no announced progress on agreeing to an extension of the enhanced subsidies for buying ACA marketplace insurance. Those subsidies expired going into 2026, raising the prospect that many enrollees would face significantly higher out-of-pocket premiums.

The ultimate impact on enrollment and the healthcare industry remains to be seen. Through mid-January, reported enrollment was roughly 1.2 million lower than it was at the same point in 2025, with the potential for the gap to widen as enrollees who were auto-renewed drop out by choosing not to pay their initial premium.

CMS is hoping the ideas presented this week in a newly proposed rule can help stabilize enrollment from 2026 to 2027. Comments on the rule are due by March 11 at regulations.gov.

Marketplace plan design flexibility

The 2027 rule for the marketplaces would make non-network plans (which are similar to reference-based pricing plans) eligible to join the marketplaces.

Non-network plans do not maintain a contracted network of providers but would need to meet ACA standards for essential health benefits, coverage protections, and standards in areas such as network adequacy. They would need to demonstrate that they offer a sufficient choice of providers, including those that furnish mental health and substance-use disorder services.

“These plans set specific benefit amounts for covered services and communicate those benefit amounts to enrollees who may then seek covered services from any provider,” CMS wrote.

In a fact sheet, the agency said the goals of the proposal are to:

• Empower marketplace enrollees to utilize price transparency information to negotiate directly with providers, knowing they are not affected by whether a provider is in-network
• Eliminate administrative costs from network management, potentially leading to lower premiums

Expanded access to catastrophic coverage

The rule would widen the availability of catastrophic plans, allowing those plans to be offered with fixed terms for as many as 10 consecutive years rather than having to be renewed annually.

The rule also would expand 2025 CMS guidance allowing people to qualify for catastrophic coverage if their income makes them ineligible for ACA subsidies or cost-sharing reduction payments. Whereas the guidance applied to the federally facilitated marketplaces and to state-based marketplaces that opted in, the proposed rule would make the hardship exemption national in scope.

Catastrophic plans carry low premiums but generally the highest out-of-pocket limits of any plans on the ACA marketplaces, although three primary care visits per year and certain preventive services are covered at no cost.

For all other care, a proposed technical change would block catastrophic plans from offering benefits until the enrollee reaches 130% of the out-of-pocket limit. The idea is to give plans room to further lower premiums.

In addition, ACA bronze plans could exceed the statutory limit on out-of-pocket costs if necessary to attain an actuarial value within the required range, as long as the insurer also offers at least one bronze plan that does not exceed the limit.

CMS said the higher limits “would provide consumers with additional choice of bronze plans, including the potential for plan designs with lower deductibles and lower premiums.” Stakeholders are watching whether the subsidy expiration accelerates shifts from gold and silver plans to bronze and catastrophic coverage.

Another proposed accommodation for catastrophic plans is the option to implement value-based insurance design, such as by offering cost-free coverage of preventive services beyond what the ACA requires.

Changes affecting network composition and risk adjustment

The proposed rule would give states the option to assume oversight of certification of standards for network composition and essential community provider (ECP) representation. CMS also wants to lower the required ECP participation threshold within a market from 35% to 20%, potentially affecting the contracting leverage of safety-net providers.

Such reforms “aim to lower premiums, improve access, and give consumers greater control over their health coverage decisions,” CMS wrote in a news release.

Risk adjustment changes partially mirror those seen in the 2027 proposed rate notice for Medicare Advantage, including the application of newer enrollee-level data.

CMS is using the proposed rule to solicit feedback on the possibility of modifying the statutory medical-loss ratio (MLR), which requires that 80% of an ACA plan’s revenues derived from premiums be spent on clinical services and healthcare quality improvement.

“Given the instability in the individual market in recent years, we are seeking comment on the impact of the federal MLR standard on individual-market stability, including the impact of MLR on costs and premiums and how such impact, if any, may affect individual-market stability,” CMS wrote.

Enrollment integrity and subsidy eligibility changes

CMS did not provide estimates of the proposed rule’s impact on the uninsured rate. The rule includes some of the core provisions from a 2025 set of regulations, many of which were blocked by a federal court. That rule had been projected to increase the number of uninsured by between 725,000 and 1.8 million.

A number of the same provisions subsequently were codified in the legislation known as the One Big Beautiful Bill Act (OBBBA). The proposed rule would implement them for 2027.

OBBBA components that made the proposed rule include termination of the special enrollment period (SEP) for people with incomes under 150% of the federal poverty level. In addition, stricter rules on subsidy eligibility could affect people who do not document their income, as well as some lawfully present immigrants.

The new rule also incorporates the failure to file and reconcile provision from the OBBBA, although not until 2028. The provision renders enrollees ineligible for subsidies in any year when they do not file a tax return and reconcile their subsidy amount with their income, as needed. To date, enrollees have been ineligible only if they failed to meet the requirement for two consecutive years.

CMS also is soliciting feedback on eliminating the option for ACA plans to use fixed-dollar or percentage-based premium payment thresholds to maintain coverage for enrollees who underpay their premiums.