• The Biden administration announced major changes to the Affordable Care Act, including excluding DACA recipients from coverage, shortening the open enrollment period, and banning federal subsidies for certain gender transition procedures. These reforms aim to cut costs, reduce fraud, and ensure ACA resources are allocated more efficiently.

WASHINGTON, D.C. — The Biden administration announced sweeping changes Friday to the Affordable Care Act (ACA) aimed at cutting taxpayer costs, preventing fraudulent enrollments, and refining eligibility requirements for marketplace coverage. These revisions—projected to save up to $12 billion by 2026—include the exclusion of Deferred Action for Childhood Arrivals (DACA) recipients from ACA coverage and a shortened open enrollment period.

The Centers for Medicare and Medicaid Services (CMS) finalized the rule Friday, marking a significant shift in federal healthcare policy. The new measures will affect eligibility for ACA Exchange coverage, Basic Health Program (BHP) enrollment, and federal subsidies such as premium tax credits. The administration’s stated goal is to realign the ACA with fiscal discipline and personal responsibility, while addressing issues of wasteful spending and improper enrollment.

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“CMS is restoring integrity to ACA Exchanges by cracking down on fraud, protecting American taxpayer dollars, and ensuring coverage is there for those who truly need it,” said CMS Administrator Dr. Mehmet Oz.

The reforms also include a prohibition on federal subsidies for certain gender transition procedures and tighter deadlines for open enrollment. These changes come amid ongoing debates over healthcare access, immigration policy, and gender ideology in taxpayer-funded programs.

Key ACA Reforms: Cost Savings and Eligibility Changes

According to CMS, the finalized rule reinstates a 2012 interpretation of “lawfully present,” effectively barring DACA recipients from accessing ACA Exchange coverage and related subsidies, including cost-sharing reductions. This reverses an effort by President Biden to expand DACA eligibility for health insurance coverage, which faced legal challenges from states and criticism over misuse of taxpayer funds.

The changes are expected to impact approximately 150,000 DACA recipients who would have otherwise been eligible for ACA enrollment. A December 2022 ruling by U.S. District Judge Daniel M. Traynor granted a stay to 19 states challenging Biden’s rule, setting the stage for CMS’s reforms.

“We estimate that over 4 million people may have been improperly enrolled in 2024—many not even knowing that they were enrolled or that their plan changed,” Dr. Oz said. “We’re adding verification policies to ensure the people who need and qualify for ACA Exchange coverage and benefits are the ones who are getting them.”

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Additionally, the open enrollment period has been shortened. The new period will run from November 1 to December 31, instead of extending to January 15 as in previous years. CMS estimates the tighter timeline will streamline enrollment and reduce administrative costs.

Ban on Federal Funding for Gender Transition Procedures

As part of the reforms, the administration introduced a rule prohibiting federal subsidies for procedures aimed at “sex-trait modification.” According to the CMS press release, this includes surgeries and treatments designed to align an individual’s physical appearance with their gender identity. The move aligns with President Biden’s broader push to curb the use of taxpayer funds for gender-transition services across federal programs.

“Prohibiting federal subsidies from being used to help cover the cost of specified sex-trait modification procedures ensures that taxpayer dollars are directed responsibly,” CMS stated.

Impacts on Taxpayers and Families

The administration claims the reforms will drive down individual marketplace premiums by an average of 5%. According to CMS, these cost reductions could lead to significant savings for American families while addressing concerns over improper enrollments.

Health and Human Services Secretary Robert F. Kennedy Jr. noted that the rule underscores the administration’s commitment to fiscal responsibility and market sustainability. “We are strengthening health insurance markets for American families and protecting taxpayer dollars from waste, fraud, and abuse,” he said.

While supporters argue the changes will ensure ACA resources are allocated efficiently, critics see the exclusion of DACA recipients as a politically charged decision. Former President Obama, who signed the ACA into law 15 years ago, defended the DACA program on its thirteenth anniversary this week, emphasizing the contributions of Dreamers to their communities.

“These reforms should make taxpayers and families feel confident that their hard-earned dollars are being spent wisely and efficiently,” said Dr. Oz.

What’s Next?

The finalized rule is poised to shape the future of ACA enrollment and federal healthcare policy. As the reforms take effect, CMS will monitor their impact on cost savings, eligibility, and program integrity.

Americans are encouraged to review their healthcare plans and consider how these changes may affect their coverage options in 2024. Open enrollment begins November 1, with the updated deadline of December 31.

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