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August 22, 2025

AUTHORS
Troy Oechsner
Jillian Kirby Bronner
Courtney Burke

Introduction

The Rockefeller Institute of Government is monitoring activity at the federal level that may have implications for New York’s healthcare system. In addition to the enactment of the One Big Beautiful Bill Act (OBBBA), analyzed in a recent blog post, this brief summarizes a new federal regulation from the US Department of Health and Human Services (HHS) that would alter regulations implementing the Affordable Care Act (ACA). The Rule, titled “Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability,” which is scheduled to become final on August 25, 2025, is being challenged in a lawsuit by California, New York, and 19 other states.

Many of the changes in the Rule include provisions that were struck from OBBBA by the Senate parliamentarian because they did not comply with the rules for passing a budget reconciliation bill with a simple majority. The Rule allows the Trump administration to accomplish a similar result, despite the ruling by the parliamentarian; however, because rulemaking is generally easier to modify than statute, the Rule’s provisions could be modified by a future administration without consent from Congress.

The Rule imposes a series of restrictions that HHS estimates will result in up to 1.8 million enrollees losing coverage nationally in plan year 2026. Because New York is both a state that has expanded Medicaid coverage eligibility under the ACA and currently operates a basic health plan (BHP) option, known as the Essential Plan, New Yorkers with incomes up to 250 percent of the federal poverty level (FPL), equal to $80,375 for a family of four in 2005, may be less significantly impacted. The estimated number of New Yorkers impacted by the Rule is roughly 226,000. These are people who are enrolled in a qualified health plan (QHP) through the NY State of Health (NYSOH)—the state’s official state-based ACA marketplace—where they can receive federal tax credits (known as “advanced premium tax credits” or shortened to “premium tax credits (PTC)”) that help reduce their premium payments on a sliding scale up to earning 400 percent of the FPL or $128,600 for a family of four in 2025.

As summarized below and discussed in our other analyses, the Rule includes both permanent and temporary changes or impacts. Permanent ones include:

1. less generous benefits;
2. more expensive coverage;
3. shorter enrollment periods;
4. limiting automatic reenrollment for certain enrollees;
5. eliminating coverage for certain deferred action for childhood arrivals (DACA) individuals and
6. limiting coverage for gender-affirming care.

Temporary changes, which generally sunset at the end of the 2026 plan year, include:

1. significant new paperwork verification requirements;
2. newly allowing insurers to deny coverage for past-due premiums;
3. adopting a $5 monthly premium payment for certain enrollees who are eligible for a $0 premium; and
4. requiring the Federally Facilitated Marketplace (FFM) to verify eligibility for new special enrollment period (SEP) enrollments.

HHS justifies these changes largely to address a perceived improper enrollment problem. These changes (both permanent and temporary) raise several questions about the future of coverage nationally and in New York State. Like with the changes authorized in the OBBBA, the ramifications for New Yorkers are significant. The impacts on New York may be mitigated by the state’s adoption of a basic health program option known as the Essential Plan, but the full scope of change is unknown. Below are some critical questions raised by the Rule and the OBBBA that will be discussed in depth:

• How much are consumers paying for coverage? Coverage costs include payments for premiums and out-of-pocket costs, as well as cost decreases due to the availability of subsidies. The Rule is likely to increase costs for consumers and businesses.
• What benefits will be covered? The Rule may affect coverage of the minimum essential benefits currently required under the ACA and the federal executive’s authority to limit coverage through regulation. The Rule will likely reduce benefits currently required by the ACA to provide a minimum of comprehensive coverage.
• Where does the Rule apply? Will states that have developed their own marketplaces face different coverage requirements compared to states that use the federal marketplace? The Rule will likely result in uneven requirements in different states, contrary to the ACA’s goal of establishing minimum national standards.
• Who is covered? Will the Rule affect coverage for noncitizens and alter the definition of “lawfully present” for the purposes of eligibility for health insurance programs? The Rule will likely result in fewer New Yorkers eligible for ACA coverage.
• How to impose checks against improper payments or enrollments without limiting appropriate coverage? The Rule will likely impose new impediments to enrollment, while potentially addressing at least one concern about individuals remaining enrolled in an ACA subsidized plan without their knowledge.

Read the full policy brief.