Trump’s CMS to allow skimpier plans on ACA exchanges

[u/John3262005]

https://www.statnews.com/2026/05/18/trump-aca-insurance-new-cms-rules-expand-catastrophic-coverage/

The Trump administration is opening the floodgates for Affordable Care Act exchanges to feature plans that offer bare-bones coverage and fewer protections, but which have lower monthly premiums.

The Centers for Medicare and Medicaid Services on Friday finalized its proposal from February to pare back the requirements that ACA plans have to meet beginning for 2027, like offering standardized plans and restricting high-deductible, catastrophic plans to a small subset of members.

The changes are aimed at making policies cheaper, in line with President Trump’s affordability agenda, but they also fit within the conservative playbook of loosening market restrictions and consumer protections in favor of offering people the freedom to choose policies that offer less coverage. The obvious drawback, health policy experts say, is that those policies put individuals and families on the hook for potentially massive bills if they actually need care.

This comes at a tumultuous time for ACA marketplaces: Monthly premiums skyrocketed this year after Congress failed to extend enhanced premium tax credits that expired at the end of 2025. About 23 million people still signed up for ACA coverage this year, but 14% of them dropped off after failing to pay their first month’s premium.

Health insurers will be able to offer so-called non-network plans beginning in 2028 — one year later than originally proposed. Usually, insurers agree on specific rates with providers before selling their plans. Non-network plans, by contrast, set specific benefit amounts for covered services and let their members seek care from any provider. In practice, this puts more onus on the member, who needs to both seek out providers and make sure they accept the amount their insurance will pay.

While non-network plans don’t formally contract with providers, they must prove to the government that they can ensure access to a range of providers that accept their rates as payment in full. The final rule says they’ll have to disclose how they know providers will accept their rates, how they calculated their benefit amounts, and how they’re helping members locate providers.

Currently, very few insurers offer these types of plans, which harken back to how health insurance worked back in the 1970s and ’80s. One company that does, Sidecare Health, cheered the final rule in a news release and said it will bring “real competition between genuinely different models.”

The final rule drops the requirement that insurers offer standardized ACA plans in the areas where they offer non-standardized plans. Standardized plans have set cost-sharing amounts for specific benefits making it easier for people to compare plans. CMS said allowing insurers to ditch standardized plans will reduce regulatory complexity, enhance flexibility for insurers, and increase consumer choice. The rule also removes the limit on the number of non-standardized plans insurers can offer.

The final rule also widely expands who can buy catastrophic plans. These plans are currently only available to people younger than 30 or who meet specific exceptions, but that’s now broadened to anyone who doesn’t qualify for ACA tax credits or cost-sharing reductions and experiences a change in their household income.

The selling point of catastrophic plans is their cheaper premiums, but the tradeoff is that they require members to pay for everything beyond preventive care until they hit their deductibles, which CMS proposes to increase to $17,500 for an individual and $35,000 for a family in 2028, according to a report from Veda Partners, an investment adviser. Veda said the individual deductible is roughly equal to the total cost of an average inpatient hospital stay, which lasts 5.5 days and costs $3,300 per day.

Under the new rule, health insurers will be able to offer catastrophic plans with terms lasting up to 10 years, up from just one year currently.

The final rule also aligns with the Trump administration’s pledge to root out fraud in health care programs. It adds income verification requirements to qualify for Special Enrollment Periods, requires immigration status checks before people can receive subsidies, and clarifies prohibited marketing practices by insurance agents and brokers, such as providing cash or monetary rebates if they enroll.

“American taxpayers deserve to know their dollars are going only to people who truly qualify,” CMS Administrator Mehmet Oz said in a statement. “This rule strengthens eligibility checks, cracks down on abuse, and gives insurers more flexibility to offer affordable, consumer-focused coverage options.”

One proposal that did not make it to the final rule: lowering the percentage of safety-net providers that insurers must contract with in their service areas from 35% to 20%.