CMS Proposes Rolling Back ACA Plan Design Limits for 2027

In addition, CMS is proposing to permit plans with lower deductibles and higher out-of-pocket maximums as part of an effort to broaden affordable coverage options.

The Centers for Medicare & Medicaid Services (CMS) has proposed rolling back limits on nonstandard plan designs offered on Affordable Care Act (ACA) marketplaces, marking a significant policy shift for the 2027 plan year.

In the proposed Notice of Benefit and Payment Parameters for 2027, released on February 9, CMS stated that it intends to discontinue a Biden-era rule that restricted insurers to two nonstandard plan designs per metal level on the exchanges. The agency also plans to eliminate the requirement that insurers offer standardized plan options.

The earlier limits were introduced to simplify plan comparisons for consumers. CMS stated that the proposed changes would reduce regulatory complexity and enable issuers to design coverage with greater flexibility. Insurers would be permitted to continue offering standardized plans, but would no longer be required to do so.

The proposal would also expand catastrophic coverage options. CMS is seeking to allow insurers to offer catastrophic plans in one-year terms or in consecutive multi-year terms of up to 10 years. The agency said the change is intended to support longer-term investment in patient care. It is also considering revisions to hardship exemptions for individuals over age 30, potentially allowing more adults to enroll in catastrophic plans.

In addition, CMS is proposing to permit plans with lower deductibles and higher out-of-pocket maximums as part of an effort to broaden affordable coverage options. Certain innovative, non-network plans could qualify as marketplace plans if they demonstrate sufficient provider access.

The rule includes updates to network adequacy and provider access standards, with CMS stating that it aims to modernize requirements while reducing duplicative oversight.

Beyond plan design changes, the proposal outlines stricter eligibility and income verification processes for premium tax credits. CMS said enhanced enforcement measures are intended to ensure subsidies are reserved for eligible individuals and to reduce improper enrollments and unauthorized plan changes. The agency also plans to introduce new legal requirements related to eligibility for immigrants seeking financial assistance.

Stronger standards for brokers and agents are included in the proposal to address fraud and misleading marketing practices.

“We are cracking down on improper and misleading practices while giving states and health plans more room to innovate and compete,” CMS Administrator Mehmet Oz, M.D., said in a press release.

Enhanced premium tax credits implemented during the post-COVID recovery expired Jan. 1, as lawmakers continue to debate their future.

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