Dive Brief:
State exchange directors sent a letter to Senate leadership this week urging lawmakers to reconsider provisions in the reconciliation megabill that are set to significantly reduce enrollment in Affordable Care Act plans.
The letter asks the Senate to reject policies in the House-passed bill that would create red tape to getting ACA coverage, and to extend more generous credits for ACA plans scheduled to expire at the end of this year. All told, cuts to federal healthcare programs in the bill, coupled with the expiration of the subsidies, would lead to 16 million Americans losing health coverage, according to the Congressional Budget Office.
Seventeen mostly blue states plus Washington, D.C., sent the letter Monday to Senate Majority Leader John Thune, R-S.D., Senate Finance Committee Chairman Mike Crapo, R-Ind., Senate Health, Education, Labor and Pensions Committee Chairman Bill Cassidy, R-La., and their Democrat counterparts.
Dive Insight:
The House passed President Donald Trump’s “big, beautiful bill” in May, sending the legislation — which is jam-packed with GOP priorities like extending tax cuts from Trump’s first term, ending clean energy programs and heightening immigration enforcement — to the Senate for review.
Republicans in the Senate are expected to edit the legislation to increase its chances of passage in that body. Various committees are expected to unveil their portions of the bill soon, given the rapid timeline at which GOP leadership is aiming to get it approved.
As a result, lobbying groups are scrambling this week to cajole senators into tweaking the legislation to align with their priorities — including in healthcare, given federal health insurance programs would see dramatic cuts under the House’s draft of the bill.
According to estimates released by the nonpartisan CBO on Wednesday, nearly 11 million people would become uninsured if the legislation is passed as-is, with 7.8 million losing coverage due to changes to the safety-net Medicaid program.
Though the GOP bill stops short of repealing the ACA altogether, its impacts would be similar in magnitude to repeal bills Republicans were pursuing in the late 2010s, according to the nonprofit think tank.
Overall, the projected coverage losses would roll back about half of the insurance gains made in the U.S. since the ACA was passed more than one decade ago.
Steep coverage losses in ACA plans would stem from policies creating new administrative barriers to coverage, such as eliminating automatic reenrollment, shortening enrollment windows, cutting special enrollment periods and requiring enrollees to submit more paperwork to prove their eligibility for subsidies.
The bill would also cut financial assistance for many immigrants in the U.S. legally.
Other changes would result in higher net costs for enrollees, like policies increasing the percent of income enrollees have to pay in premiums and allowing plans to cover a smaller share of costs.
Republicans say the reforms are necessary to combat fraud and refocus the exchanges on needier beneficiaries. However, marketplace experts say the bill would result in many eligible enrollees losing coverage.
And that’s without the expiration of enhanced subsidies for ACA plans that are credited for spurring record enrollment this year. If the enhanced tax credits run out at the end of this year, another 4.2 million people would become uninsured, according to the CBO.
In their letter to Senate leadership, the state exchange directors criticized the legislation for forcing states to create new bureaucratic thickets that would restrict access to care and increase the uninsured rate.
The GOP bill would also sicken the ACA’s risk pools, raising costs for everyone else, according to the letter.
“Administrative burdens of this nature mean that only the sickest Americans will jump through the new onerous hoops, with younger and healthier enrollees who keep risk pools stable and affordable opting out. Everyone still insured will be stuck with higher premiums,” the letter says.
Restricting subsidies for lawfully present immigrants will also harm risk pools, given that population tend to be younger and healthier than enrollees on average, according to the letter.
State exchange directors also raised concerns about the timeline of the legislation, given open enrollment for coverage next year begins in fewer than six months.
“Health insurers have already begun filing rates for 2026, and in a mere matter of months, states will begin mailing letters to Marketplace enrollees informing them of their costs for the coming year,” the letter reads. “There simply is not enough time for implementation. Pushing through so many harmful and operationally complex changes on this timeline while hamstringing states from using longstanding flexibilities to adapt will result in market destabilization and avoidable consumer harm.”
The letter was signed by state exchange directors mostly from blue states, including California, Connecticut, Colorado, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, Washington and Washington, D.C.
However, the exchange director in the purple state of Pennsylvania, which has a divided state government yet went for Trump in 2024, also signed the letter — as did the exchange director for deep-red Idaho.
Advocates are cautiously optimistic that they’ll see changes to the megabill’s healthcare provisions in the Senate, given some Republican senators have said they’re wary of steep cuts to healthcare programs, especially Medicaid.
The legislation is also facing sharp and high-profile criticism from billionaire and erstwhile Trump ally Elon Musk, who called it a “disgusting abomination” on his platform X on Tuesday, citing the increase in the national debt.
The Senate is aiming to get the bill to Trump’s desk by July 4.
