Low-Income Special Enrollment

Additional enrollment opportunities

In September 2021, a Special Enrollment Period went into effect for low-income households.

Unfortunately, the Trump administration eliminated this year-round SEP, on August 25, 2025.

Other SEP’s exist but they are limited to special life events and have time limits.

The new special SEP was tied to income and is available year-round.

• The One Big Beautiful Bill Act (OBBBA) blocked premium tax credits starting in 2026.

• In May 2026, CMS finalized a rule to permanently ban all state and federal exchanges from offing this special low-income monthly SEP.

♦ An estimated 2.6 million to 4.2 million Americans dropped or lost their health insurance plan do to the elimination of this SEP.

During the time this new low-income SEP was available, applicants enrolled in a health plan through the federal marketplace at any time during the year. And coverage took effect the first of the following month.

• State-run exchanges had the option to set a deadline to complete the application in order to have coverage start the first of the month.

The new policy for low-income special enrollment applied to the 30 states using the federal health exchange or marketplace.

State-run exchanges were not required to offer this SEP. There are 18 state-run exchanges.

State-run exchanges that were offering this SEP were: Colorado, Maine, Pennsylvania, New Jersey, California, and Rhode Island.

Several other state-run exchanges had no need for this SEP, because they have other programs with year-round availability. This includes:

• New York and Minnesota, both of which have programs that cover people with income up to 200% of FPL.

• Massachusetts offers Connector Care to people with incomes up to 300% of FPL (enrollment is open year-round to people who are newly eligible or who have not been covered under the program in the past).

• DC offers Medicaid to adults with income up to 215% of the poverty level.

To be eligible for this low-income SEP, an applicant’s household income could not exceed 150% of the federal poverty level (FPL).

♦ This low-income SEP ended on August 25, 2025 meaning no new person could use this SEP. Anyone already enrolled in a health plan based off this SEP kept their insurance until the end of the year (2025).

• For a single person, 150% of the poverty level amounts to an income of no more than $22,590 to qualify for coverage in 2025.

• For a household of four, it was $46,800.

Federal poverty levels are higher in Alaska and Hawaii.

• You had to be eligible for premium tax credits in order to take advantage of this SEP.

This SEP was only available on-exchange, since premium tax credits aren’t available off exchange.

To get on-exchange coverage, a person had to enroll directly through the exchange or marketplace.

• There was also a new option called Enhanced Direct Enrollment (EDE). Enhanced direct enrollment (EDE) is a new pathway for consumers to enroll in health insurance coverage through the Federally-facilitated Exchange.

CMS partnered with the private sector to provide a more user-friendly enrollment experience. They hoped.

Under this pathway, consumers started on a broker site and were redirected to Healthcare.gov to complete their subsidy application.

♦ August 25, 2025, CMS phased out what they call Classic DE and instead approved a new EDE pathway that relied upon approved sites to host and complete end-to-end Healthcare.gov applications. Confirm eligibility, submit documents and review credits.

Many brokers were unhappy because this change required them to invest heavily in extensive software engineering. They had to build secure sites and design APIs to host Healthcare.gov's system natively.  This was a huge cost that many smaller agencies could not handle.

• Brokers also complained about lost revenue. The One Big Beautiful Bill Act (OBBBA) ended enhanced premium subsidies. This in turn caused million of consumers to drop out of the marketplace entirely. Fewer active enrollees translated directly into a massive loss in residual monthly commission checks.

• CMS implemented rigid new verification rules, doubling or tripling the time brokers spend gathering and documenting an application. More time spent translates into less profit per hour.

Brokers May Not Be Helpful

The insurance industry’s trade group opposes allowing people to sign up outside of the year-end open enrollment period. They argue that sicker people will wait to enroll until that last minute and thereby drive-up costs.

• Brokers are now asking, “Why sell something I don’t get paid for?”

Many people take advantage of federal and state marketplaces. But experts say that a large number of people find the process of deciding a health plan too much to handle and would prefer to use a broker.

This is especially true for low-income Americans, young people who are less experienced with health insurance, and people who are not proficient in the English language.

The concern now is that brokers will have a higher tendency to steer consumers to plans that pay them a commission but may not be the best at meeting the needs of the customer.

Eligibility

In states where Medicaid is available adults in most cases are covered up to 138% of the federal poverty level. In these states, this low-income SEP would have only been available for people with incomes over 138% but less than 150%.

In states where Medicaid has not been expanded, this SEP was available to households with incomes between 100% and 150% of the federal poverty level. Unfortunately, for households with incomes less than 100% this SEP did not help those people.

After August 25, 2025, no one can apply for this low-income SEP because it was terminated.