How the Reconciliation Bill Limits States’ Authority Over ACA Insurance Markets

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Twenty states (including the District of Columbia) manage their own Affordable Care Act Marketplaces, including large states such as California, New York, and Georgia. An additional three states have State-Based Marketplaces that use the federal enrollment website, Healthcare.gov.

The One Big Beautiful Bill Act includes a number of sweeping changes to the ACA Marketplaces, many of which are aimed at “addressing waste, fraud and abuse in the ACA Exchanges.” If enacted, the bill would override many policies currently set by State-Based Marketplaces (SBMs), particularly around eligibility and enrollment.

The bill would limit the flexibility of SBMs by preempting state authority in several key areas. For example, states would lose the ability to:

• Set their own open enrollment periods
• Offer special enrollment periods (SEPs) based on income
• Extend the 90-day verification period for eligibility documents
• Automatically reenroll individuals from bronze to silver tier plans
• Include gender-affirming care as an Essential Health Benefit (EHB)
• Offer qualified health plans (QHPs) that include abortion coverage if receiving federal cost-sharing reductions (CSRs)

In addition to limiting the ability of states to enact certain policies, the bill would impose new administrative obligations. States would be required to:

• Verify income, immigration status, eligibility, place of residence, and household size of every individual prior to issuing coverage
• Conduct SEP eligibility verification for at least 75% of all QHP enrollments during any special enrollment period

Taken together, the reconciliation bill’s provisions impose additional administrative burdens on State-Based Marketplaces and could limit state flexibility in choosing marketplace policies and procedures.