View Comment Letter

The proposed rule would raise costs substantially, including by increasing maximum out-of-pocket expenses per family to an unaffordable $31,200 for bare-bones catastrophic plans.

The changes in the proposed rule would force up to two million more Americans to lose their health insurance. Those losses would come on top of the millions of Americans who have already lost their health coverage due to changes enacted by the Administration last year, including from the “Big Beautiful Bill.”

The U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) released a proposed rule on February 11, 2026. It is supposed to allow states to prepare for open enrollment under the ACA for plan year 2027. This proposed rule contains numerous, unprecedented changes that, if enacted, would do the exact opposite of the ACA’s goals, which are to increase the number of Americans covered by health insurance and decrease the cost of health care. The rule was also filed later than any previous payment rule in at least a decade, limits public comment to 30 days, and does not give states enough time to implement the massive changes it demands.

“Instead of lowering health insurance costs and widening access to high-quality health care, the Trump Administration’s big idea is to expand access to skimpy plans that cost more—shockingly more—and give you less for your money,” said Governor Mikie Sherrill. “This comes on top of President Trump’s already disastrous choice to refuse to extend ACA tax credits, which caused nearly 500,000 New Jerseyans to see their premiums triple this year, and his changes to Medicaid, which kicked off 300,000 New Jerseyans. As he keeps making life more unaffordable, it is up to New Jersey and other like-minded states to demand common sense health care.”

“The proposed rule creates a health care regime that is unaffordable for most everyday New Jerseyans, creates a byzantine process for enrolling in health insurance, and imposes costly burdens on the states to comply with new requirements,” said Attorney General Davenport. “In addition, it is audacious, and a waste of government resources, to include in this payment proposal provisions from last year that were successfully stayed by a court and which New Jersey and other states are continuing to challenge. We all deserve better and more affordable health care, so I will keep demanding it.”

"This rule runs counter to every health insurance goal we have for New Jerseyans – it would put consumers at risk, push them into inadequate coverage, make enrolling harder and open to fewer people, increase opportunities for fraud against consumers, and destabilize the operations of the NJ’s State-based Health Insurance Marketplace, which continues to serve nearly half a million consumers," said Susan Ochs, Acting Commissioner of the Department of Banking and Insurance, which also submitted a comment letter. "Enacting this rule would have devastating consequences for the people of New Jersey."

“Getting routine, preventive medical care is essential to maintaining good health – and already too many New Jerseyans go without because they can’t afford it,” said Dr. Raynard E. Washington, Acting Commissioner of Health. “The proposed rules would make the situation worse, making people less healthy, driving up health care costs and medical debt, and pushing patients off of health insurance.”

The proposal has multiple provisions that, if enacted, will raise health care costs for everyone, no matter the type of insurance. Many of the proposals are untested and even HHS acknowledges it is not entirely certain how some of them would work.

A sampling of these issues include:

·    The proposal not only uses flawed data and logic, it contains basic math errors, as well as fails to consider the impact of the changes wrought by the Administration last year;

·    It adds costly, burdensome recordkeeping and reporting requirements and layers on new application systems for states;

·    It eliminates standardized health care plans and introduces “non-network” plans, which is likely to cause consumer confusion;

·    It makes changes to essential health benefits, including removing adult dental health coverage, without making a statutorily required report to Congress, and without providing a reasonable justification for the change;

·    It eliminates a low-income special enrollment period, which will affect consumers who are unaware that they no longer have Medicaid coverage, leaving them uninsured;

·    It allows a new marketplace exchange model using a private sector approach for web brokers without explaining how consumers will be protected from brokers motivated by commission incentives to sell poor-quality plans;

·    It includes three provisions of last year’s Marketplace Integrity and Affordability Rule, which were stayed as unlawful or arbitrary in prior litigation with New Jersey and other states.

In addition, the proposal seeks to expand catastrophic plans beyond their original limited use intended by Congress when it passed the landmark 2010 ACA. These plans have fewer consumer protections and are not required to abide by ACA rules on covering essential health benefits, preexisting conditions, or not imposing annual and lifetime limits on coverage. Currently, catastrophic health plans are allowed in limited situations.

Under these plans, health insurance coverage does not begin until significant maximum out of pocket costs (MOOP) have already occurred. Currently, that is $12,000 for an individual or $24,000 for a family, which is already too costly.

In the 2027 plan year, those MOOP limits would increase to an unaffordable $15,600 for an individual and $31,200 for a family. Enrollment in these bare-bones catastrophic plans would expand to individuals too poor to qualify for Medicaid, increasing the risk that these costs would lead to medical bankruptcy.

Additionally, the proposed rule would allow an untested industry concept: multi-year catastrophic plans, where an individual could stay enrolled for as long as 10 years, and would allow insurers offering these types of plans to set different MOOP limits based on disease, such as cancer or type 1 diabetes. This is illegal under the ACA, as it would constitute discrimination based on preexisting health conditions. These higher MOOP limits would also apply to Bronze-tier ACA plans, which is not allowed by statute, and would likely induce consumers to switch into the catastrophic plans, creating a sicker, more expensive population across all ACA plans.

As the letter explains, taken together, these and other proposed changes could lead to a “death spiral” in health insurance markets. This, in turn, would mean premiums for comprehensive health coverage, which already jumped this year as a result of the president’s first year in office, would soar even higher.

If this rule is allowed to take effect, New Jersey’s state ACA exchange, GetCoveredNJ, will be faced with significant confusion, increased costs, and operational stress.

Taken together, the changes would hike premiums, shift more health care costs to consumers, add layers of confusion and barriers when selecting insurance plans, increase the cost, administrative, and regulatory burdens borne by states, and further destabilize marketplace exchanges. The comment letter explains that these changes are all arbitrary and capricious and are therefore unlawful if ultimately adopted.

In addition to Attorney General Davenport, California Attorney General Rob Bonta, and Massachusetts Attorney General Andrea Joy Campbell, the letter was signed by the Attorneys General of Arizona, Colorado, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Washington, and Wisconsin.