Suit claims ACA changes will result in mass coverage losses

Three cities and two advocacy organizations filed suit against the Centers for Medicare and Medicaid Services over a recent final rule changing enrollment requirements for Affordable Care Act coverage.

Doctors for America and the Main Street Alliance joined the cities of Baltimore, Chicago and Columbus in filing the lawsuit in a Maryland federal court.

The plaintiffs said the CMS final rule will cause as many as 1.8 million Americans currently covered under the ACA to lose coverage in 2026, leading to increased premiums and out-of-pocket costs in the future.

ACA changes aimed at fraud

The CMS final rule was published June 20 and CMS said the rule was aimed at cracking down on fraud by preventing improper ACA enrollments. Provisions of the rule include:

• Repealing the monthly special enrollment period for individuals with projected household incomes at or below 150% of the federal poverty level, a policy CMS said is used by some agents and brokers to improperly enroll ineligible consumers and perform unauthorized plan switching to gain commissions.
• Requiring income verifications to ensure people qualify for the premium subsidies they receive.
• Conducting eligibility verifications for most enrollments through SEPs, closing loopholes that allowed people to wait to enroll until they needed care and improving the risk pool.
• Reducing advanced payments of the premium tax credit by $5 a month for individuals who are auto re-enrolled in fully subsidized plans without eligibility verification.
• Standardizing the annual open enrollment period starting with the 2027 plan year so that it ends by Dec. 31 for all health insurance exchanges, encouraging people to maintain year-round health coverage instead of waiting until they get sick to enroll.

In their suit, the plaintiffs noted ACA enrollees must pay a $5 monthly surcharge next plan year until the person confirms an intent to remain on a zero-premium plan covered by premium tax credits. Independent estimates cited in the complaint find enrollment will decrease by 14% to 33% from this provision.

Plaintiffs also said they expect the new rule to weaken the quality of silver plan coverage, resulting in a less robust risk pool.

“In other words, an individual might complete all the steps to enroll in coverage, including making the payment they understand to be needed to complete the transaction, only to learn at the end of the process that they have not been enrolled.” the plaintiffs said.