Financial advisors be ready: Your clients on the cusp of retirement – between 55 to 64 years of age – who do not have health insurance through their jobs will likely be the hardest hit by upcoming changes to the Health Insurance Marketplaces established by the Affordable Care Act.
Wading through the web of complex changes, which are being phased in over a three-year period that starts in 2026, is going to be tedious and frustrating for everyone: financial advisors, their clients, insurance brokers, and officials running the state insurance marketplaces.
For policyholders, the changes are also going to be costly.
Gross average premiums across the various state insurance marketplaces could increase between 7% and 11.5%, on top of claims trend, according to a report turned out recently by the Wakely Consulting Group.
“This is going to be most disruptive for early retirees … who are not yet 65. Those in the 55 to 64 age group. They will be the biggest cohort affected,” said Zach Sherman, managing director of Health Management Associates in Boston. Sherman shared these comments after a webinar, “The Future of the ACA Individual Market: Policy Shifts and the Proposals Before Congress.”
Health Management Associates is a national research and consulting firm in the healthcare industry. Wakely Consulting Group, an HMA company, specializes in actuarial consulting for healthcare,
Significant Factors
During the July webinar, Sherman and other marketplace experts laid out the implications of the Wakely report, “The Future of the Individual Market: Impact of the House Reconciliation Bill and Other Changes on the ACA Individual Market.” that was finalized in mid-June.
The report’s analysis considered a range of significant factors, including provisions in the House budget reconciliation bill, changes to the Marketplace Integrity and Affordability regulation, and the expiration of enhanced premium tax credits, also known as ePTCs, at year’s end. These credits are essentially subsidies that can lower the cost of health insurance premiums for individuals buying insurance plans.
The 2025 budget reconciliation legislation, also known as the One Big Beautiful Bill Act (H.R.1), was signed into law by President Trump on July 4. It was passed by the U.S. House of Representatives on May 22 and the U.S. Senate passed its version (with amendments) on July 1. The House then agreed to the Senate’s version on July 3.
Smaller and Less Stable Marketplaces
The Wakely paper determines that the individual market will look fundamentally different when the full effects of all the changes kick in. “This report shows that the totality of the proposed Congressional changes and the expiration of ePTC could lead to a much smaller and less stable individual market,” said Michelle Anderson, a director and consulting actuary at Wakely and one of the paper’s authors.
“Enrollment could shrink to the lowest it’s been since the culmination of the ACA Marketplaces in 2014,” said Anderson. “Remaining enrollees are likely to be sicker and to have higher healthcare needs than those who will drop coverage, which in turn will weaken the risk pool and drive up premiums.”
According to Wakely, the combination of expiring subsidies and the full enactment of H.R. 1, The One Big Beautiful Bill Act, could reduce individual market enrollment by 47% to 57%, or 11.2 to 13.6 million individual market enrollees. The House bill alone could reduce enrolment by 22% to 27%, or 5.2 to 6.4 million enrollees.
Ksenia Whittal, a senior consulting actuary at Wakely Consulting Group, told webinar viewers that the analysis, carried out during the first half of June, does not account for subsequent changes, such as the final Marketplace Integrity and Affordability rule as well as the passage of the 2025 budget reconciliation legislation.
Whittal said that while the House budget bill includes a number of provisions that span 2026 through 2028, Wakely modelled the impact of all the provisions as if they were to become effective in 2026. “But really the full effects would be more gradual in nature, and realized fully by 2028,” she said. The report shares national averages and ranges of impact, yet these ranges could be exceeded at a state level, she added. “Please keep that in mind,” said Whittal, as “issue impacts could be more variable from what we share today.”
Everyone Will Be Busy
Sherman said financial advisors and marketplace officials will have their work cut out for them this fall as they prepare to guide clients through the 2026 open enrolment period, which starts November 1. Some financial advisors, whom are licensed insurance brokers may be better able to navigate the shifting terrain. He said it would be difficult to estimate an average monthly premium increase as each marketplace is so different.
Sherman said people in the 55-to-64 age cohort who are working, such as sole business proprietors, part-time workers and gig workers, are going to feel the impact of the legislative changes.
State marketplaces will need to ramp up customer service and navigation support. “We would expect to see a lot of plan switching this coming open enrollment with net premium changes,” he said. The success of state marketplaces to deal with these changes will hinge on their technology implementation schedules. “Whether or not they have capacity to make changes so quickly, whether or not there’s budget and resources available to increase call center capacity. Whether or not there’s budget to put into the navigator program to add in resources,” Sherman said. All state marketplaces have been preparing for change for a long time, he added.
“So nobody’s starting this week. There’s been planning and contingency efforts, and I think efforts will be made to make it as smooth as possible,” Sherman said. “But I think it’s not going to be easy.”
He added that additional eligibility and operational changes are required for the 2027 plan years and beyond. New pre-enrollment verification requirements will need to be implemented for 2028 “which will create additional barriers to coverage and additional paperwork requirements” for consumers making new applications and renewing coverage. “There will be a need to for continued communication and education efforts,” he said.
He urged everyone to be ready for more changes. “This is probably not the last change in this environment that we’re going to see,” Sherman said. “States should be anticipating in budgeting for additional federal policy changes.”
Paula L. Green is a New York City-based freelance journalist with more than three decades of reporting and editing experience that spans coverage of international business and finance issues to murders and politics at the Jersey Shore to presidential press conferences in Argentina and Mexico. She can be contacted by plgreen12004@gmail.com. To read more of her articles, click here.
