The Trump administration has unveiled sweeping regulatory changes to Affordable Care Act plans, proposing catastrophic coverage as a solution to rising premiums. The proposal would allow millions more Americans to enroll in high-deductible plans with annual out-of-pocket costs reaching $27,600 for families. The changes aim to provide more choices while potentially causing up to 2 million people to drop insurance.

Health and Human Services Secretary Robert F. Kennedy Jr. and Medicare Administrator Mehmet Oz announced the rule as affordability concerns grow following the expiration of enhanced ACA subsidies. Initial enrollment for 2026 dropped by over 1 million compared to the previous year. The administration argues these changes will "put patients, taxpayers, and states first by lowering costs and reinforcing accountability."

The proposal dramatically expands eligibility for catastrophic plans, making them available to anyone earning below the poverty line or more than 2.5 times that amount who lost subsidy eligibility. While these plans typically offer lower premiums, they require policyholders to pay thousands in out-of-pocket costs before coverage begins. Insurance brokers note the changes could appeal to both wealthy Americans seeking lower premiums and low-income individuals who might otherwise remain uninsured.