Understandably, the legislation plodding through Congress is most closely associated with reductions in Medicaid spending, but there is new scrutiny on how the megabill could impact the state of the health insurance marketplace.

Policy observers see the next six months as hugely pivotal, with a series of actions and provisions potentially responsible for cutting enrollment in the Affordable Care Act (ACA) exchange by one-third, said KFF President and CEO Drew Altman. Marketplace enrollment has increased 113% over the last five years to 24.3 million covered individuals.

Enhanced premium tax credits are set to expire at the end of the year. If they do, enrollment in the ACA marketplace will decrease by 4.4 million people but save $358 billion over a 10-year period.

A proposed rule from the Trump administration could see 2.2 million (PDF) additional people lose coverage if finalized, reports the Congressional Budget Office. This rule, which has elements included in the bill, would shorten the open enrollment period, cause data verification inconsistencies and eliminate a special enrollment period, which drew criticism from insurer Oscar Health during its latest earnings call.

Funding for the ACA navigator program was also axed by 90% in February after years of support during the last administration. Navigators help individuals enroll in marketplace plans, but the program was one of the first targets for the new leadership at the Centers for Medicare & Medicaid Services (CMS).

Other changes in the reconciliation bill, out of the Ways and Means Committee, could see many more lose coverage.

The bill would require some individuals to pay their premium in full before their eligibility is confirmed.

Some individuals experience “data matching issues,” where processing form delays, income changes or family composition changes creates documentation inconsistencies, explained Urban Institute senior fellow Jason Levitis and Christen Linke-Young, former deputy assistant to President Joe Biden, in a blog post for the Georgetown University Center on Health Insurance Reforms. The marketplace processed more than 6 million data matching issues in 2022.

Right now, these individuals are granted temporary eligibility for up to 90 days to get those issues straightened out. That flexibility would disappear under the reconciliation bill, meaning enrollees would pay the full premium. Notably, any family with a newborn baby, recent marriage or divorce, job change or income change would likely be wrapped up under these changes.

Certain immigrants, like refugees and asylees, would no longer be eligible for tax credits if the current bill is signed into law. And it would also halve the enrollment period, install stricter enrollment procedures and mandate low-income enrollees in states that have not expanded Medicaid to owe back tax credits they receive.

“In the largest non-expansion state, Texas, a consumer who thought they would make $15,500 a year but ended up making $14,500 could be required to pay back nearly $6,000 in tax credits,” explained Altman.

Eligibility for cost-sharing reductions (CSRs) would be significantly limited, wrote Levitis and Linke-Young. States and health insurers were recently tipped off by the CMS changes to CSRs could be coming.

The bill would eliminate passive reenrollment, which nearly 11 million enrollees capitalized on to retain coverage, the authors said.

“Certainly, steep new consequences for passive reenrollment would change behavior,” they noted. “However, experimental evidence indicates that there is reason to be cautious about the ability to influence consumers’ propensity towards active reenrollment.

“By shortening the open enrollment period and taking away the most meaningful opportunity to remediate the loss of advanced premium tax credits, the combined policy will mean that most people who are snared on Dec. 15 will ultimately end up without coverage,” the authors added.

All told, it’s reasonable to assume upward of 8 million people could be kicked off the ACA marketplace by early next year. Analysts with Manatt Health estimate 10 million enrollees may lose coverage and premiums would increase on average by 75% for 90% of ACA enrollees.

“Proportionally, that’s a much bigger enrollment and coverage loss than projected for Medicaid,” said Altman. “Marketplaces have to maintain a fixed operational structure to function (supported by plan payments to them, not government), so if enrollment falls too much, smaller marketplaces in smaller states may no longer be viable.”