ACA 2027 Proposed Rule: Actuaries Model a 2 Million Enrollment Drop as HHS Widens De Minimis and Eliminates Income-Based SEP

HHS published its 2027 Notice of Benefit and Payment Parameters on February 11, 2026, with comments closing March 13. CMS's own regulatory impact analysis projects the rule will remove 1.2 to 2 million people from marketplace coverage and cut federal premium tax credit spending by $10.4 billion in 2027.

Previous payment notices moved one or two parameters. This one moves three, and each pushes the same direction: fewer enrollees, thinner benefits, and a sicker remainder in the pool that 2027 rates have to cover.

Key Takeaways

CMS projects a 1.2 to 2 million enrollment decline and $10.4 billion less in premium tax credits for 2027, from an enrolled base that already fell 4.9% from 24.2 million in 2025 to 23.1 million in 2026.
A silver plan can sit at 66% actuarial value while an expanded bronze reaches 65%, one percentage point apart, under the +2/-4 de minimis range the rule carries forward.
APTC repayment caps are gone from tax year 2026. An enrollee who previously owed at most roughly $1,550 to $3,150 now repays the full excess, with relief only below 100% FPL.
The de minimis provisions were stayed in August 2025 and the stay was still in effect in April 2026, so 2027 filings are being certified against two possible rate levels.
Pre-enrollment verification is proposed for 75% of SEP applicants, a procedural change that suppresses enrollment fastest among the enrollees with the least reason to finish the paperwork.

Three Levers, One Direction

The rule runs 577 pages and touches everything from user fees (2.5% for the FFE, 2.0% for SBE-FP) to risk adjustment methodology. Three provisions carry the enrollment effect.

Actuarial value de minimis. Standard metal levels keep a +2/-4 percentage point range and expanded bronze keeps +5/-4, against the original ACA framework's +2/-2 and +5/-2.
Income-based special enrollment period. The year-round pathway for people at or below 150% of FPL, made permanent in April 2024, is closed. HHS suspended it in a June 25, 2025 rule, and the One Big Beautiful Bill Act (P.L. 119-21) made it permanent nine days later by barring premium tax credits for anyone enrolling through an income-based SEP not tied to a qualifying life event.
APTC repayment caps. Removed starting with tax year 2026, so excess advance credits are repaid in full regardless of income.

The SEP change is the one actuaries should treat as settled. A future administration could restore the enrollment period by rule, but the premium tax credit prohibition is statutory, and full-price coverage is not economically accessible at 150% of FPL.

Three Attrition Channels, Three Different Populations

The projected enrollment loss is not a uniform haircut, which is what makes the morbidity adjustment hard. Each lever removes a different slice, and all three slices skew toward net payers.

The de minimis range works through migration rather than exit. As Georgetown's CHIR put it, with a silver plan permitted down to 66% actuarial value and an expanded bronze permitted up to 65%, the benefit gap between the two most popular metal levels compresses to a single point. A silver enrollee above the CSR income threshold is paying a full silver premium for that point. The ones who move are healthier than the silver average, because expected utilization is what makes the richer plan worth its premium.

The APTC change works through avoidance. Take the rule's own arithmetic: an enrollee projecting $40,000 of income receiving $305 a month, or $3,660 a year, whose income comes in at $60,000, previously repaid a capped amount between roughly $1,550 and $3,150. Now they repay the entire excess. The people carrying that exposure are those with the widest confidence interval around a projection, gig and commission and seasonal workers, and those in the higher income brackets where the uncapped amount is largest. Both groups are net contributors.

The SEP closure and the proposed 75% pre-enrollment verification work through friction. Income-based SEP enrollees skewed younger and healthier because many were moving from uninsured status, where they had consumed little care, into coverage mid-year. Pre-enrollment paperwork deters exactly the enrollee whose expected claims do not justify the effort.

That is three separate morbidity effects with three different demographic signatures, and a single adjustment factor applied to a projected enrollment total will not represent them. For scale on the sensitivity, carrier-level morbidity adjustment factors in the 2026 benchmark cycle ran from 1.0025 to 1.044. Meanwhile the cost-sharing ceiling moves under the same filing: the 2027 maximum annual limitation is proposed at $12,000 self-only and $24,000 family, up 13.2% year over year, with catastrophic deductibles at 130% of that, $15,600 and $31,200.

Certifying a Rate Against an Unresolved Record

The complication is procedural, and it lands on the certification rather than the model.

A judge stayed the widened de minimis provisions in August 2025, and as of April 2026 the stay remained in effect. QHP application windows for 2027 open April 16, 2026, and the final rule is not out. Actuaries are therefore filing under two live scenarios, one where +2/-4 holds and one where the narrower bands return, and the difference between them runs several percentage points depending on assumed metal-level migration. The memorandum has to state which assumption underlies the filed rate and how the rate level moves under the other.

A second disclosure lands in the same filing. From plan year 2027, issuers using CSR loading must report both retrospective and prospective CSR-related data in the Unified Rate Review Template and the Actuarial Memorandum. Silver loading has operated with limited regulatory transparency since 2017; the methodology now has to be justified on the record, in the same document that is carrying a contingent de minimis assumption.

The American Academy of Actuaries raised the sharper version in its March 13 comment letter. If catastrophic plans are separated from the metallic risk pool, both segments are certified on thinner credibility, and transfer payments become volatile in the early years of the split. The Academy also noted that most carriers do not have the infrastructure to track and report catastrophic experience separately, so the build cost lands in the administrative expense load of the same 2027 filing that is pricing the split.

Multi-year catastrophic enrollment, permitted for up to 10 consecutive years under the proposal, compounds it. BCBSA warned of premium increases of 50-300% and insolvencies by analogy to long-term care, and Centene called multi-year pricing incredibly difficult given medical trend uncertainty. Annual plans let an actuary recalibrate trend each year. A ten-year commitment asks for a trend assumption at year ten, certified now.

ACA 2027 Proposed Rule: Actuaries Model a 2 Million Enrollment Drop as HHS Widens De Minimis and Eliminates Income-Based SEP

Key Takeaways

Three Levers, One Direction

Three Attrition Channels, Three Different Populations

Certifying a Rate Against an Unresolved Record

Further Reading

Sources