Top Senate Dems blast proposed ACA rule promoting ‘junk coverage’ that would push estimated 2 million off enrollment

A trio of top Senate Democrats led their colleagues in condemning a proposed rule by the Trump administration that would lift restrictions on the number of nonstandardized plans that insurers in the Affordable Care Act (ACA) marketplace can offer and promote catastrophic health plans, which are high-deductible plans meant for worst-case scenarios.

In February, the Centers for Medicare and Medicaid Services (CMS) submitted a proposed rule for the benefit and payment parameters for ACA plans in 2027.

In a letter first shown to The Hill, Democratic Sens. Tammy Baldwin (Wis.), Chuck Schumer (N.Y.) and Ron Wyden (Oreg.) said the rule would cause ACA plans to “increase deductibles, cover fewer services, and kick providers out of network.”

The proposal calls for ending requirements that ACA health plan issuers offer standardized plan options, which require them to offer specific cost-sharing structures, while lifting restrictions on how many non-standardized plans marketplace issuers can offer.

In its proposal, CMS said this rule change would “reduce issuer and HHS burden and regulatory complexity and enhance flexibility for issuers to innovate in plan design.”

States would also be permitted to replace their state-based exchanges with what the administration referred to as “State Exchange Enhanced Direct Enrollment.” This would allow states to instead use a “private sector-based approach” that relies solely on web brokers to operate consumer-facing websites.

The rule additionally seeks to allow for catastrophic health plans to have terms of multiple years, up to 10. These are plans with low premiums but very high deductibles, generally meant to ensure coverage during unexpected medical emergencies. Catastrophic health plans are normally on annual terms.

In its proposal, the CMS stated, “Based on the analysis presented thus far in this section, we expect average enrollment for 2027 to decrease between 1.2 and 2 million enrollees compared to baseline estimates.”

Writing to CMS Administrator Mehmet Oz, the Democratic senators demanded that he withdraw the rule.

“President Trump told the American people he would protect them from the ‘big, fat, rich insurance companies, who have made trillions, and ripped off America long enough,’ they wrote. “Rather than keep this promise, this administration has proposed a rule that CMS’ own experts predict will kick 2 million Americans off the health care they have and accelerate the health care affordability crisis.”

They argued giving states the option to switch to “for-profit web brokers” would promote “junk coverage” and make it harder for consumers to compare plans.

The rule also proposes that health insurers be barred from including adult dental services as part of essential health benefits, services that must be covered under the ACA. The administration said this would follow ACA statutes that require essential health benefits to encompass the scope of typical employee-sponsored plans.

The senators said instead of prohibiting essential health services, efforts should be made to ensure more people can access coverage when 72 million adults don’t have dental insurance.

“We should be focused on lowering the cost of care and ensuring that insurance companies cannot raise costs, reduce coverage, and take advantage of working families. We hope that you will join us in this effort by proposing a rule that will help, not harm, Americans and ensure access to affordable and comprehensive health insurance,” wrote the senators.

Other lawmakers who signed the letter include Democratic Sens. Ed Markey (Mass.), Dick Durbin (Ill.), Jeff Merkley (Oreg.), Ben Ray Luján (N.M.), John Hickenlooper (Colo.), Angela Alsobrooks (Md.), Alex Padilla (Calif.), Michael Bennet (Colo.), Chris Van Hollen (Md.), Patty Murray (Wash.), Elizabeth Warren (Mass.), Richard Blumenthal (Conn.), Lisa Blunt Rochester (Del.) and Sen. Bernie Sanders (I-Vt.)

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