In this episode of Regulatory Joe, we break down the critical changes to Healthcare.gov that will reshape health plans in 2025. From streamlined enrollment to simplified plan selection, we dive into how these updates will impact issuers and plan operations in both federally facilitated and state-based marketplaces.
📌 Key Takeaways:
- How the election results could reshape federal and state control over ACA marketplaces
- The future of American Rescue Plan (ARP) insurance subsidies
- What will happen with the newly released draft of the 2026 NBPP
- And more!
🔔 Subscribe for more regulatory insights and health plan updates!
Welcome to regulatory Joe. I'm Joe Boyle, the president of regulatory solutions here at Penn Stock, and today I'm pleased to have Josh Schultz join me, strategic engagement manager at Citizen, a subsidiary of Softion, to discuss the impact of the election on the ACA. Josh, tell us a little bit more about yourself and Citizen. I have a background in health care, going back about 12 years, working with the ACA and Medicaid and other related issues, and I came to Softion and now with the subsidiary Citizen, going on four years ago. Citizen is a newly created subsidiary, well we're about six months old legally, but we've existed since 2017 when we decided to do a diversification due to the presidential election in 16, changing the direction of the ACA, moving into different markets within Softion. So Citizen is a subsidiary that focuses on both the operation and administration of government ACA marketplaces, as well as Medicaid eligibility and HHS eligibility verification software systems. That's awesome. You know, I was so excited to see when Softion launched Citizen because there has always been a need for that niche space of support for the state-based marketplaces and exchanges, and I think it's actually highly relevant that we're talking about this today because we do know that at this point in the year, you know, states release policies and legislation and regulations, you know, every month for all 12 months throughout the year, but most especially in Q4 of each year, we know that there's very, the very large push for the annual federal guidance that comes out, and I do think that with the election coming up that we're going to see a little bit of, I guess, more of a strengthening of certain policies across different states, understanding certain states lean one way or another, and certain states represent state-based marketplaces or federal marketplaces. Do you think that this year will be unique in the sense that we'll see changes we never have in the past from CMS or different divisions of insurance? Well, I think that one of the biggest changes could be that depending on who wins the election, the either the changes in the annual notice of benefit and payment parameters that everyone has been scrutinizing very closely, which is at the federal level, as we all know, or some of the other changes downstream from that could be either pulled back through the Congressional Review Act, although that's not commonly used, or frozen and then re-evaluated because changes, at least at the federal level, made so close to an election if a different political administration or party comes into power can be re-evaluated and changed. And I think that's something that's adjacent to what you're really talking about here. Could have perhaps a difficult to predict pivot in the regulatory space for health insurers and as well as the government agencies that administer health insurance related programs? That's a really good point too. And I'm actually glad you brought that up because CMS did release the earliest time ever in the history of the ACA, the earliest notice of benefit and payment parameters the first week of October. So if you look out there, we'll actually see, plan your 2026 proposed ruling is available for comment. And I believe the comment period is allowing issuers and individuals to produce a comment in a position by the first week of November. I believe it's November 12th, if I'm not mistaken. So I would envision a lot of issuers are scrambling to review and disseminate to see what the proposed rules mean for them for next year. And it's interesting to say, so if the office does change for plan your 2026, what the implications would be on issuers thinking about entering new marketplaces, whether it's a state-based marketplace or a federal exchange, or even changing their strategy entirely based on those decisions. I did notice that last year's notice of benefit and payment parameters did have a heavier focus on state-based marketplaces and the impact that issuers had to actually solve. I'd be curious to see if that theme stays the same as we also see states converting to state partnership exchanges and state-based exchanges entirely over the next couple of years. We personally see it becoming a theme, but we'd love to get your thoughts more on that. I think that's a really interesting and involved question and answer because it could go a lot of different directions. If Kamala Harris wins the election, you could see pretty much more and more blue states, states that vote with democratic politicians, either run their own exchanges or in the minority circumstances are either the state partnership exchanges or there's another designation similar to that where they actually even run more of the exchange than a partnership, but basically take on more and more of the functions of the federal exchange to healthcare.gov that is or run their own exchange. This allows them to have more of a hand in operating the insurance markets and many, many states such as California, New Jersey, others have enacted state-based subsidy programs to help people buy insurance when their income went above the eligibility limit for ACA subsidies. And now some of those subsidies were supplanted and important by other legislation, but having the exchange allowed them to do that. I do think that whether or not more states go to to these different exchange designations will directly be impacted by who wins the presidential election. And I think that you could see a swing toward state-based exchanges in red states or states that typically vote with Republican candidates in the other circumstance if President Trump is re-elected. Thank you. That is a great response and I would say that with respect to even the control that state-based exchanges have over something like subsidies, we do see that expanded access being a point of contention for Plan Year 26 and 7 with the option, like you mentioned, to either rescind those expanded subsidies or continue them in perpetuity. So it's interesting because when we look at the growth of the ACA marketplace since 2014, we're at an all-time record high of members across the country qualifying for savings. I would have to envision that members are wanting their subsidies for years to come and I would think that states are promoting advocacy for that very reason. Now other than subsidies, do you see that states or state-based exchanges will start to strengthen certain policies around their plan designs or members based on any results from the election for specific conditions of coverage, new programmatic requirements for issuers or even new requirements that could impact citizen or softion? Well, I would think that that actually ties into something that not this most recently released regulation and notice of benefit and parameters but the one right before it went into which was establishing or working toward establishing or evaluating whether CMS should more closely regulate the ways that states operate their exchanges, the states that have decided to build their own healthcare exchanges, whether CMS should have more of a hand in that and that goes not just to the plan design certification but also to review for network adequacy and these sorts of rules whether they should be set up at the federal level or not and that sort of progress towards those sorts of things could either continue under a Harris administration or could be pulled back and reversed very significantly under a Trump administration as we saw when it pivoted from the Obama administration to the first Trump administration in 2017 in the first regulatory notice, the same regulatory notice that was issued that year. I think there could be a lot of different changes that will affect both state regulators as well as issuers and the people who are designing plans and figuring out how much they cost. I guess the other thing to your other point and maybe we can talk about this a bit more but the really looming on the horizon issue for everyone here is whether or not the American Rescue Plan subsidies passed in 2021 get extended in some way shape or form or whether they get are allowed to expire because before 2021 people above 400 percent four times of the poverty level didn't get any help on the marketplace and people below that level didn't get as much help and that changed and that's set to expire it's been extended once it's set to expire and I think people I've talked to on both the right and left agree that enrollment as you just kind of alluded to enrollment in the markets will return probably to 2020, 2019 levels if that happens and depending on how that happens obviously affecting all sorts of stakes. You bring up a really good point Josh because what we know about the traditional ACA member is really you know where subsidies come into play is you know we're talking about members that we serve that generally work more than one part-time job at a time who struggle with obtaining transportation to get to the doctor to actually get the care that they need and may even question should I pay my mortgage or car payment this month or do I pay my health insurance premium which subsidies you know by reducing that cost burden on the member is life-changing for so many reasons and to improve health care outcomes across the board for everybody in our country so you know I'd be very curious to see how that continues to be extended or even managed through the end of this year and then Josh with respect to you know membership so I would say you know the impact for health plans if subsidies were to go away not only would members struggle to afford the care that they need boomeranging back into conditions that we've all tried to solve over the past number of years but what would that mean for the issuer in payer space the actual health plans that serve the members today that create the plans that furnish the plans that actually work to produce enrollment and billing with soft neon do you have any thoughts on maybe the broader I guess environment of insurance companies and what that would mean well I think that in any regulatory or market related environment there are always going to be opportunities even when there are changes that that might initially be perceived as disadvantageous you know for example a decrease in enrollment in the EC markets that might be quite significant could be coupled with a rather significant increase in uptake in into what's what we call ACRA or individual coverage health reimbursement arrangement which is a way that employers can give their employees a fixed amount of money here you go and then you can go buy a plan on the market instead of on the marketplace instead of the employer setting up designing and administering the plan directly and this would increase not only increase enrollment in the ACA markets themselves it would also bring what we call good risk into the markets you know a healthy it generally healthier people who have you know full-time jobs full-time higher paying jobs so you know that that's it that's one aspect there could be more of a focus on bank account type you know putting transitioning the ACA subsidies into bank account type arrangements and using them to pay copays and this sort of thing and not just full premium it more that more aligns with some of the republican type visions for the way these programs should work and should have historically worked so yeah I think that payers should be concerned about a drop in enrollment but where they're it's not guaranteed that they will expire it's not guaranteed that the you know President Trump said something in the debate I'm not remembering the exact line the most recent debate with Kamala Harris that indicated that that's been interpreted by by republican folks as indicating that he would be open to an extension of the subsidies so I don't think it's a guarantee and I think there are a new opportunity where there are other disadvantages thank you Josh no that's great too and I think what what it's starting to make me think about is well even with the introduction of ICRA into the marketplace as a product alternative to your traditional let's say qualified health plan I'd be curious to think if there's even like an opportunity for net new products to be created that never existed before outside of ICRA to actually you know achieve those funny arrangements that you talked about so that'd be interesting to see if that would actually cause a whole new market appetite for something brand new oh yeah I mean especially if there are there's more flexibility under what's called section 1332 this is how can I I keep fearing that I'm getting a little too wonky here but but section 1332 of the the ACA allows the marketplaces the exchanges the administrators of them in the states to seek waivers of the way that the ACA statute would otherwise function and that would allow some of these exchanges to sell other products besides just the straight health and dental plans and and so that that could also include some of what you're thinking about here probably not a California or Michigan or Illinois thing probably more of you know Texas thing and you know in fact it's you know probably you know multiple southern states you know would be interested in some some you know some analysis of that yeah no that's interesting too because generally we see themes starting with certain states and other states adopting those decisions and choices so I would say yeah you know for anybody listening out there it's probably going to be very good for you to follow some of these large scale changes and if you have a team internals your organization definitely track it because I would think you would agree Josh staying ahead of some of these these changes outcomes of the election are going to be critically important come one one to be able to implement on those decisions so yeah I would encourage everybody just to think about that too you know Josh I know you have an extensive political experience and you follow both parties but if you could just share a little bit more of your thoughts candidly about the Trump administration versus the Biden-Harris administration and where you think that falls within the discussion of the impact of ACA next year would love to hear from you but it's definitely an interesting topic and it's very very topical for payers as well as government agencies that administer some of these benefits and programs it I think it can be broken down pretty simply which is that the if any of this is can be simple that the Republican side the Republican view is more of a focus on reducing gross premiums so the premiums before any subsidization happens by the government that is maybe changing the benefits and structure of a plan to make it less expensive or underlying factors that affect the cost of the plan cost of medical care and this sort of thing and then the democratic side has very aggressively since 2014 when the ECI went into effect but then really sort of in the second wave of the ACA around 2018 2019 worked to aggressively subsidize and then extra subsidize the ACA markets building in state-based exchanges in several states where they were building subsidies on top of the ACA and then passing additional legislation that gave more assistance to consumers from the perspective of how much they paid after the assistance was applied and so those two visions they sort of served to focus on perhaps different groups or constituencies a little bit and they do aim to get potentially different results but ultimately both parties share the goal of bringing down the price of healthcare for the key stakeholders you know that is interesting because so I mean that's one thing that they can mutually share which is great news marching towards that same beat and it's interesting because when we look at how carriers are filing you know some of their rates for plan year 2025 and what that means for 2026 we've even seen carriers start to raise some of their rates to come back some of the expense that happens behind the scenes at the insurance companies expense so that being said I would say at least if they can agree on one mutual topic the cost of care or total cost of care is is definitely an important one now looking after year one providing the results that occur this November do you think that there's going to be more of a significant impact year one or a gradual impact over the four years of term of the president to enter the office I think I think it would be a slow impact I think it would be a slow impact and I would also sort of amend amend what I just said to add that many many many Republican politicians and certainly the regulators who work under them have grown to adopt and embrace key aspects of the ACA including the subsidization the subsidization of premiums such that here in Texas where I live they passed a bill through the I believe went through the legislature to get it done called premium alignment that significantly increased the amount of ACA federal subsidies that the state drew down coming from from Washington to policyholders in the state of Texas and dramatically reduced premiums so there is a belief by many people on the Republican side on the health policy side that this is the way that we've decided to set up the framework for health care and that whether or not Trump wins whether or not Harris wins it's more about tinkering around the edges rather than wholesale dismantling or changing so kind of weaving that into the answer to your question I think that changes that we would see if let's say that pretty likely Harris administration is going to be status quo and maybe even depending on how Congress looks a slight increase in subsidization if they're able to get it through at least to continue the status quo changes on the other side in terms of attrition of subsidies I think I think it could be very slow but we'll see I think it depends on the makeup of Congress it depends on what state someone lives in and the plan is operating in so it depends on a lot of factors it's hard to answer for the entire country. Fair enough no and you make some really good points too and using Texas as an example is is a really good state example because the way we look at that is there as a direct enforcement state generally speaking you know some of the FFM markets seed to see us so the fact that Texas is allowed to increase that premium stabilization or premium offering to members is highly valuable I would I would even be curious to learn if members would start to move out of state into new states to find greater access to coverage or more affordable care based on that and we see movement of membership from different books of business for each carrier even kind of thinking how to track that or how to anticipate serving members in different counties and communities could be very interesting quite frankly. It really could be I mean I had always wondered if you know when the Affordable Care Act was originally passed and then two years later the Supreme Court said that the expansion of Medicaid to people just above the poverty line was optional whether people obviously they're poorer it's harder to move if you have less money might still migrate between states to states that had expanded or not but to be honest I've met people since I've been in Texas you know younger people youngish people closer to my age who happened to have Medicaid expansion in a different state and then they moved here and didn't get it so I'm not I'm not so sure that the cost of insurance unless you have a serious health condition is going to be the governing factor for where you want to live. Good point and it's interesting because we did see I mean to tie it back even to the notice of benefit payment parameters even folks with chronic conditions or pre-existing conditions you know could be in a very interesting scenario to your point. Now let me ask you a question so when we talk about the individual shopping on the ACA marketplace and what that means for an individual member at Citizen and in your role are you actually looking at impacts or evaluating any type of I guess downstream flow of events to small groups under the ACA so I know we define small group really in like two separate ways so it really lives one to fifty in most states but then in some states like New York or Colorado small group is defined as one to a hundred but anything from the group life perspective that you think would be drastically impacted or more just more so for the individuals collecting subsidies on the exchange rather than off the exchange or elsewhere. Well it's interesting I think that there is a slow trend you know the ACA exchanges did create a group marketplace for the states to have and that is one of the technologies that we are proud to support at Citizen. There is a trend of more states being interested in supporting that technology and in the politics and the legislation to look at doing things in the Republican-leaning states there has often at least in one case that I'm thinking about probably two been kind of an angle like you know this could help small businesses and whether this could help the small business market or there could be a technology to help them you know I'm thinking about the legislation specifically that was introduced in in Texas actually but you know it's a theme I've heard elsewhere too. I think the biggest impact though and the biggest and most immediate impact of any electoral outcome will be for purchasers in the individual market or people for whom they're in a group plan now but under new regulations they're going into the individual market through ICRA as we talked about earlier. Very nice no that's good and all good points too I'm curious to see you know where that goes and you're from enrollment because we do know at least the markets we serve when we look at it small group is definitely the minority from the overall ACA membership and population so we'll have to stay tuned for that yeah and Josh I think at this point you know I think it's been a great discussion so far this is actually really fun and I'll just say you know it's hard to find like-minded individuals like yourself who actually get enjoyment out of you know talking about these topics so just in general what else is citizens seeing leading up to November leading up to this election that we should be aware about anything you know you personally think is important just to call out or anything that citizen believes you know marketplaces should be looking out for because as a leading supplier I think you know people will look to you guys for some of that cursory support and possibly guidance as well. I think that a couple of themes or areas will increase in use and in importance regardless of who wins the election one is enhanced direct enrollment EDE where over half it might be close to 60 percent of enrollments through healthcare.gov people who sign up for insurance come through a third party through the EDE technology that we were one of the leading partners with CMS to implement ourselves and in a lot of clients that they just they think it's simpler easier connects them to the insurer more directly. We've talked about ECRA again you know I think that that will it's time will come right so far the sign-ups through ECRA aren't that huge but it's it's growing year over year and it will come whether or not it's Harris or Trump especially if it's Trump I would think but it's more based on the dynamics of a state's market and and and federal dynamics I would think I would also look toward state responses to whether or not the ARP subsidies don't get extended you know so like a bunch of states before the ARP the the additional subsidies that people could get that really made the ACA so much more financially good looking to a lot of enrollees if that doesn't get extended through the past the end of next year you know there's a lot of states that had subsidies have subsidies could create them they need a state-based exchange the subsidies might look different depending on the political construct of the state so those are those are some things that are on the horizon both you know leading up to the election and a little bit after the election yeah that's something to think about too and and while we're on that topic so let me ask you so as it relates to state advocacy and the implementation of subsidies do you feel that health plan associations or state associations will have a lot of influence over those decisions for example we we work with a number of associations that bring marketplaces together such as ACAP or associate California Association of Health Plans or even Massachusetts Association of Health Plans what's your take on those association groups and their involvement with marketplaces and also plans I think they play a really critical role because they know so many of the stakeholders and they they know that the way things work on the ground as well as as the people to talk to and and and for a smaller insurer who might not have as much of a lobbying budget could serve as a gateway to advocate for those things when they can't do it directly so I would say that trade associations would have a big impact it would also obviously depend on the individual functions of the of a state you know how the how the politics and everything work in a particular state because it's going to be different from one to the next great now I'll ask a moonshot question here too and if you need a minute to you know answer let me know but I have to ask do you think there's ever a scenario in our lifetime per se where all states would become in the state based exchange or marketplace where there is no federal exchange any longer where they adopt those practices I can't say there would be but I'd just be curious for your thoughts based on the like tying it back to the parties of the democratic side versus the republican side do you think that's even possible there are certain states that are so small um so small in terms of the number of people enrolled in the health plans that it would be it's much cheaper less expensive cheapest not the right word when you're talking about the cost of health care dot gov but less expensive to use health care dot gov than to build your own or implement your own exchange no matter how you look at it so the the framework would have to shift and it is possible that under a republican administration they could emphasize EDE which we we've spoken about more and reduce the emphasis on the full scale health care dot gov at which point the cost balance calculation might change for some of those states but you know a state I'm just trying to think of the smallest what's the smallest state like they're probably not going to do it but I could see a situation where most like you know 85% or more do and then the the role of health care dot gov gets scaled back and that's that's really interesting to hear because I would agree I mean that makes sense to over time and over the next let's say decade or even two decades probably that's slow change and when we think about I guess state-based marketplace is you bring up a good point on fees and expenses it's it's not cheap to implement the capabilities that the state's exchange has enrollment and billing that's a big part of what softie on and citizen deal with and even in terms of call center stability and service operations those types of items that you need to either build or you need to buy or you know scale that business up when we think about user fees I believe and not sure how close you are to this but isn't it anywhere between 1.5 or 2.5 percent of admin fees is what gets paid to the state exchange by the the payers so I think you know 1.5 percent of membership premiums you know for a small state you're right isn't a ton of money but for a larger state state's exchange multiplied by millions of members you know that it's a it's a flow of funds that goes you know that's through the 834 sorry the 820 files that go back and forth from you know from the payers through softie on any thoughts on user fees I guess would be the question in terms of as we see potential themes in states becoming SPEs over over the next number of years over the next decade do you see user fees going up where payers could be starting to be charged more based on those 820 file payments and to what degree should that be I guess you could say limited to some degree I definitely think that the user fee could go up and the reason that it could go up is because it's it's already too high and it's in my opinion and it's already supporting things that you know states should get to choose whether or not they want my information says it's 2.2 percent per phrase here but you know it's it's very high and you know some states pay hundreds of million they through the carriers pay hundreds of millions of dollars a year to use it and maybe double what it would cost to run their own marketplace the situation where it could go up up up is if the bigger states that are using it currently leave and then Texas peels off Florida peels off all of a sudden they've got all these little states but they've got a gigantic contract with a couple of systems integrators in a very expensive or three call center and mail vendors and they have to pay them and so either they subsidize it from the general revenue which they're they have to kind of write in an exception to the rule to do I think because they used to do that in the early days or they charge the actual fee and that would go to the remaining states and the price would keep going up so that that's the situation that could happen yeah and that could be you know favorable for for the smaller states but unfavorable for the larger states but that's right that's a really good assessment and I mean to that degree I'd be curious to see you know the future of that and what that would mean in terms of implications to plan designs or the actual member the flow downstream to be member well Josh this is a great discussion and really appreciate your time having you on the show today I just wanted to give you one final opportunity any last thoughts you wanted to share with us or for the listeners out there what they should be looking out for with the upcoming election this November or those outcomes well I would just say that there's a lot of moving parts about how things could play out and and evolve in multiple different states but some of the key trends and themes in this sphere aren't going to be changing they're going to continue whether or not either candidate wins including the shift to state-based exchanges embracing the insurance markets, ACRA and various other kind of state initiatives it's just the dynamic of how that all works out the amount of premium assistance that people get and and another few other factors that could change but the overall structure is going to stay the same well with that being said well at least we know a little bit of what to expect next year and look forward to working with citizen and following everything that you're doing and the work that you're doing to help the state-based exchanges that being said thank you everybody for queuing in give us a like give us a share and we'll see you all next time.
