The Centers for Medicare & Medicaid Services (CMS) has proposed sweeping changes to the Affordable Care Act (ACA) that could significantly impact transgender Americans who rely on ACA marketplace plans for healthcare. These regulatory shifts, outlined in CMS-2025-0020-0011, would impose stricter eligibility requirements, eliminate certain enrollment flexibilities, and remove gender-affirming care from essential health benefits. If implemented, these changes could create new financial and bureaucratic hurdles for transgender individuals seeking medical care.
Who is the CMS?
The Centers for Medicare & Medicaid Services (CMS) is a federal agency within the U.S. Department of Health and Human Services (HHS). It administers major national healthcare programs, including:
- Medicare (the government health insurance program for seniors and people with disabilities)
- Medicaid (the state-federal program that provides healthcare coverage for low-income individuals)
- The Children’s Health Insurance Program (CHIP) (which covers low-income children and families)
- The Affordable Care Act (ACA) marketplace (which provides private health insurance plans with subsidies for eligible individuals)
What CMS Does
CMS oversees policies, regulations, and funding related to these programs to ensure that millions of Americans receive healthcare coverage. The agency sets rules for insurance companies, determines who qualifies for federal health programs, and ensures compliance with healthcare laws.
CMS and the ACA
CMS plays a key role in managing the ACA marketplace, which provides health insurance to millions of uninsured Americans. The agency is responsible for:
- Setting rules for health insurance plans offered through the ACA marketplace.
- Determining essential health benefits (EHBs) that insurers must cover.
- Administering premium tax credits and subsidies that make insurance more affordable.
- Overseeing enrollment periods and eligibility rules for ACA plans.
Why CMS’s Proposed Rule Changes Matter
Because CMS sets and enforces healthcare regulations, any changes it makes to ACA policies directly affect who can access affordable healthcare and what services are covered. The proposed rule changes in CMS-2025-0020-0011 could make it harder for transgender individuals to access gender-affirming care and maintain ACA coverage, which is why advocacy and public comments on these policies are crucial.
Gender-Affirming Care No Longer Considered Essential Health Benefit
One of the most alarming proposals is the removal of sex-trait modification from essential health benefits (EHBs) starting in 2026. Currently, ACA plans must cover medically necessary services that fall under EHBs, which many states interpret to include hormone therapy, gender-affirming surgeries, and other transition-related treatments.
Under the proposed rule, insurance companies would no longer be required to cover these treatments, leaving transgender individuals vulnerable to higher costs, denied claims, or loss of coverage entirely. This change could disproportionately harm low-income trans people who rely on subsidized ACA plans to access gender-affirming care.
Tighter Restrictions on Premium Tax Credits and Cost-Sharing Reductions
The proposal also makes it harder to qualify for financial assistance under the ACA. It includes:
- Stricter income verification: If a person’s reported income does not match government databases, they will have less time to prove their eligibility before losing premium tax credits.
- Faster loss of subsidies for failure to file taxes: Those who receive advance premium tax credits (APTCs) must file their taxes to reconcile subsidies. The new rule proposes cutting off tax credits after one year instead of two, potentially catching people off guard and causing unexpected premium increases.
- Automatic reductions in premium assistance: People who qualify for a fully subsidized ACA plan will have their tax credit reduced unless they actively confirm their eligibility each year. Those who fail to do so will have to start paying a $5 monthly fee to keep their plan, which could lead to unintentional coverage lapses.
For transgender individuals, who often face employment instability and wage gaps, these new restrictions could make it much harder to afford health insurance and maintain continuous care.
Elimination of Special Enrollment Periods for Low-Income Individuals
Currently, individuals making less than 150% of the federal poverty level (FPL) can enroll in ACA plans at any time during the year. This flexibility has been essential for transgender individuals, particularly those experiencing job loss, homelessness, or discrimination in the workplace.
The proposed rule eliminates this monthly Special Enrollment Period (SEP), restricting enrollment to the annual November 1–December 15 window. This could leave transgender individuals without coverage for months, increasing the risk of interruptions in hormone therapy, mental health care, and other vital services.
Stricter Payment Policies Could Lead to More Coverage Losses
For those struggling to pay their ACA premiums, new payment rules could result in more coverage terminations. The rule allows insurers to deny new coverage to individuals who have outstanding past-due premiums, making it even harder to regain health insurance after a lapse.
Because transgender individuals face higher rates of financial insecurity, this change could leave many without a path to re-enrollment, forcing them to go without healthcare for extended periods.
Deferred Action for Childhood Arrivals (DACA) Recipients Lose ACA Access
Another significant change affects DACA recipients, many of whom identify as LGBTQ+ and transgender. The proposed rule removes DACA recipients from the definition of “lawfully present” individuals eligible for ACA coverage. This would strip trans immigrants of health insurance access, further marginalizing a population that already struggles with systemic barriers to healthcare.
How to Take Action: Public Comment Period Open Until April 11, 2025
These proposals are not yet final. CMS is currently accepting public comments until April 11, 2025. This is an opportunity for transgender individuals, families, and allies to voice their concerns and advocate against these harmful changes.
How to submit a comment:
- Visit the official government website: https://www.regulations.gov/document/CMS-2025-0020-0011
- Click on “Comment” and share how these changes could affect you or the transgender community.
- Use personal stories and specific examples to illustrate the impact of these policies.
The Bottom Line
Access to healthcare is a fundamental right, and transgender Americans should not have to fight for medically necessary treatments. These proposed ACA rule changes put vital care at risk, making it even harder for trans individuals to receive lifesaving healthcare.
The public comment period is a critical time to push back against these harmful proposals and ensure that transgender voices are heard. If these changes could affect you or someone you love, now is the time to speak out and demand healthcare policies that are inclusive, fair, and affirming for all.
