Pre-65 Health Insurance: How the Reconciliation Bill May Impact ACA Marketplace Coverage

Understanding the Potential Impact on Your Health Coverage

A new reconciliation bill currently under consideration could bring meaningful changes to health insurance access for individuals under age 65 who are not covered by an employer-sponsored plan. Many in this group benefit from Advanced Premium Tax Credits (APTC) – subsidies that reduce monthly health insurance premiums based on reported taxable income.

These credits are often a lifeline for:

• Individuals who retire before age 65, voluntarily or otherwise
• People facing a gap in coverage due to job loss and costly COBRA premiums
• Entrepreneurs launching a new venture and stepping away from employer-based insurance

What’s Changing Under Section 112201?

The reconciliation bill includes updates to how individuals qualify for and maintain access to APTC. Two proposed changes, in particular, raise important concerns:

1. Automatic Reenrollment – But With a New Risk

Today, those enrolled in ACA Marketplace coverage are automatically reenrolled – including any applicable tax credits – if they do not update their information during Open Enrollment. This ensures continuity of both coverage and affordability.

Under the proposed legislation, this process would change significantly.

For example, looking ahead to the 2026 coverage year:
If you fail to re-confirm your income during the 2025 Open Enrollment window (August 1 – December 15), you would lose access to subsidized premiums for 2026 and be responsible for the full, unsubsidized cost.

Given that income verification typically takes up to 90 days to process, even paperwork submitted on August 1 may not be finalized until late October. That leaves a narrow 2–3 week window to review options and make a plan change if needed – a tight timeline for such an important decision.

2. Elimination of the Grace Period for Documentation

Currently, when there is a discrepancy between an applicant’s reported income and their most recent tax return, the system allows a 90-day grace period to submit supporting documents. This flexibility is especially helpful when dealing with:

• Changes in employment or income
• The addition of new family members
• Job loss or marital transitions

During that window, individuals continue to receive subsidized premiums while documentation is reviewed.

The proposed bill would eliminate this grace period entirely. That means coverage would revert to the full premium amount – without subsidy – until the issue is resolved. Processing delays that exceed 90 days are not uncommon, and under the new rule, no extensions or exceptions would be permitted.

Even more concerning: this change would apply to the entire household. For instance, if you have a newborn and are waiting on their Social Security number (a process that can take 6–12 weeks), your entire family would be billed at the full premium rate – at a time when healthcare coverage may be most critical.

What You Can Do Now

While these provisions have not yet been enacted, it is wise to begin preparing if you plan to use APTC and the ACA Marketplace in the coming year. 

Consider taking the following steps:

• Keep detailed records of your current-year income
• Create a tax projection for the upcoming year
• If needed, establish a relationship with a health insurance advisor now – not later

By staying informed and proactive, you can better protect your access to affordable health insurance, even amid regulatory changes.

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1. Georgetown University’s Center on Health Insurance Reforms

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