Understanding Regulatory Changes in Health Insurance for 2025
Healthcare regulations are necessary to protect patient rights and ensure patient safety. Regulations are also crucial for preventing fraud, protecting patient data, and setting high ethical standards for healthcare providers.
Regulatory changes in health insurance evolve with each new year as the federal government responds to issues and concerns from healthcare providers and patients and gains information on how current systems are working.
We’re providing an overview of regulatory changes in health insurance for 2025 for health insurance brokers and agents to inspire content for client presentations.
Shortcuts:
What Drives Regulatory Changes in Health Insurance?
7 Regulatory Changes in Health Insurance for 2025 to Share With Customers
- Network Adequacy Standards
- Start and End Dates for Open Enrollment
- Essential Health Benefits (EHB) Changes
- Special Enrollment Period for Low-Income Applicants Is Permanent
- Terminate Marketplace Plans Retroactively
- Part D Benefit Changes
- Telehealth Regulations
What Do the 2025 Healthcare Regulations Mean for Consumers?
Healthcare Regulations in a State of Evolution
What Drives Regulatory Changes in Health Insurance?
There are four main drivers of regulatory changes in the healthcare industry.
- Healthcare costs and sustainability – PwC’s Health Research Institute projects an 8% year-on-year increase in medical costs for the group health insurance market and 7.5% for the individual health insurance market. The federal government strives to balance quality coverage with rising costs.
- Public health crises – According to the CDC, the number of COVID-19 infections is growing in at least seven states. HHS also issued advisories on firearm violence and mental health.
- Technological advances – New healthcare delivery models such as telehealth, health partnerships, wearable devices, and AI will continue to bring about new regulations to ensure data privacy, patient access, and overall quality of care.
- Consumer protection – Regulations in health insurance ensure that insurance companies provide essential health benefits and treat pre-existing conditions. Regulations also ensure providers are held accountable for premium increases and are transparent about coverages and pricing.
7 Regulatory Changes in Health Insurance for 2025 to Share With Customers
The Centers for Medicare & Medicaid Services (CMS) and the Department of the Treasury proposed regulatory changes in healthcare in November 2023. The public then had an opportunity to comment on their proposals. After considering feedback, CMS issued the final rules for 2025 in April 2024.
1. Network Adequacy Standards
CMS requires plans in state-based marketplaces to meet network adequacy standards at least as stringent as those for the federally facilitated marketplace. This rule will be in effect for plan years that begin on January 1, 2026.
The standards apply to:
- Establishing time and distances for services
- Reviewing Marketplace plan networks before certifying them and opening them up to the public
- Establishing a process where plan issuers can submit a justification if they can’t meet the adequacy standards
- Reviewing the justification and determining if the plan in question is in the best interests of those who may qualify for it
2. Start and End Dates for Open Enrollment
Before the new rules went into effect, states that administered their own exchanges were allowed to have different start and end dates as long as the end date was after December 5th.
In 2025, all state-run exchanges will have to closely align their open enrollment dates with the federal exchange dates for open enrollment that starts November 1st and ends on January 15th of the following year.
The federal government gave an exception to the state of Idaho, which has an early October start date and ends on December 5th.
The new regulations carry a “first-of-the-following-month” rule. This means if someone applies for health insurance within a specified timeframe (e.g., a few weeks before the first of the month), the coverage won’t begin until the first of the month.
3. Essential Health Benefits (EHB) Changes
Every state must create an essential health benefits plan (EHB) that outlines the standards for coverage for all ACA-compliant individual and small group health plans sold in that state. States get to decide the specific services that must be covered under EHB.
The regulations don’t require states to add new benefits or change their EHB Benchmark plans. Nonetheless, if states choose to make changes, the process will be less costly and more streamlined.
Also, under the old rules, dental coverage was required for pediatric patients but not for adults. The new regulations allow states to add adult dental to EHB, but the rule doesn’t go into effect until 2027. States could not do this previously.
The reasoning is that if the state added routine dental coverage to the EHB for adults, plans on the Marketplace wouldn’t be allowed to take away dental coverage for adults solely because patients could get a stand-alone dental plan via the Marketplace.
As part of the Affordable Care Act (ACA), states couldn’t include adult dental coverage in their EHB packages because the federal government intended EHB packages to be similar to typical employer-sponsored health plans. Most employer-sponsored plans don’t include dental coverage.
The government has since changed its view. Under the new rule, the government considered the overall employer benefit package, which commonly adds dental coverage as an option.
4. Special Enrollment Period for Low-Income Applicants Is Permanent
Under the American Rescue Plan Act of 2021, people who qualify for premium tax credit advance payments and have expected incomes at or below 150% of the Federal Poverty Level are eligible for a special enrollment period. This provision made it possible for low-income individuals and families to enroll in a health plan all year long.
The special enrollment period rule was set to expire on December 31, 2025, but the new 2025 health insurance regulations would make the special enrollment period for this population permanent.
Better access to healthcare helps people stay healthy. Those who can afford good health insurance are more likely to keep their insurance and get medical care as needed. When large populations go without healthcare, their conditions become more expensive to treat. As a result, the overall risk pool increases. Expanding access to healthcare benefits insurance companies and individuals alike.
5. Terminate Marketplace Plans Retroactively
Under the existing rules, patients with a Marketplace plan can only cancel their health plans on the same day or at a date in the future. There is no way to cancel plans retroactively.
Medicare doesn’t coordinate with people’s plans on the Marketplace. Not being able to cancel health insurance retroactively can be problematic for people who get approved for Social Security Disability or Medicare with a backdated effective date. In such situations, patients could have two healthcare plans at once and have to pay for both of them.
The new rules give HHS the option of implementing a change to allow patients to terminate their coverage retroactively under certain circumstances if they get approved for backdated Medicare coverage. This rule applies to people using the federal exchange. The new rule is optional for state-run health plans.
It’s wise to advise your health insurance customers to cancel their Marketplace coverage when their Medicare coverage begins. If HHS chooses to implement rules for retroactive cancellations, your customers may be able to backdate cancellations to the date their Medicare plan started and maybe get a refund. This rule would also save the government money.
There are a few exceptions to the rule if it gets implemented. Policies can only be backdated for six months. The rule doesn’t apply to backdating a stand-alone dental plan cancellation.
It’s worthwhile to keep tabs on the final rules HHS implements moving forward.
6. Part D Benefit Changes
CMS also released the formal changes to Part D of Medicare (prescription drug) coverage for 2025.
The new plan is comprised of the following three phases:
- Annual deductible
- Initial coverage
- Catastrophic coverage
Medicare beneficiaries will be happy to learn they can expect a much lower out-of-pocket cost for prescription drugs. The new cap is $2,000 compared to an $8,000 cap in 2024.
The coverage gap phase (also known as the donut hole) required enrollees to pay for 25% of drug costs for brand and generic drugs in 2024. It will be discontinued entirely in 2025.
The coverage gap phase will be replaced with the Manufacturer Discount Program, which means the cost-sharing for prescription drugs won’t change when they move from the initial coverage phase to the coverage gap phase. Under the old rules, the out-of-pocket cost could vary when moving from the initial coverage phase to the coverage gap phase.
Under the new rules, drug manufacturers will have to give a 10% discount on brand-name drugs in the initial coverage phase and a 20% discount during the catastrophic phase.
Part D enrollees will also be pleased to learn that the new rules will allow them to spread their out-of-pocket costs over the entire year rather than face a huge bill on any given month.
7. Telehealth Regulations
Telemedicine gained popularity during the pandemic and remains critical. The latest statistics from Techreport show that medical professionals held virtual appointments between 10% and 49% of the time. The report also showed that patients preferred telehealth appointments 47% of the time for follow-up appointments.
CMS finalized updates for 2025 in the Physician Fee Schedule, effective January 1. Key changes include:
- Ending audio-only CPT® codes 99441-99443 and recognizing only code 98016 for brief check-ins.
- Permanently adding certain behavioral health services to telehealth coverage.
- Retaining location-based telehealth designations (POS 02 for non-home locations, POS 10 for home-based services). Physicians will continue to be allowed to list their practice address rather than their home address even when performing Medicare services via telehealth from their home.
- Restoring pre-pandemic geographic and location restrictions for Medicare patients unless in rural or underserved areas, meaning that unless a Medicare patient lives or is located in a health professional shortage area, a rural census track, or a county outside of the metropolitan statistical area at the time of service, they will not be covered for telehealth services.
Allowing teaching physicians to virtually supervise residents through 2025.
The Telehealth Modernization Act of 2024 is awaiting Congressional action. If passed, it would make Medicare telehealth flexibilities permanent, addressing geographic restrictions and allowing further expansions. Until then, most telehealth services for Medicare patients outside approved areas won’t be covered after January 1, 2025. Practices and patients should prepare for this possibility.
What Do the 2025 Healthcare Regulations Mean for Consumers?
The health insurance regulations are inherently complex, making it challenging for the general public to understand the rules. For this reason, your customers will value your expertise.
As you make your presentations, you play a valuable role in educating your customers about the most important takeaways that could impact their lives for better or worse.
Screen sharing can help you highlight the specific new rules that give your customers more options and save them money one slide at a time.
Slides also provide a way for you to provide some tips for how customers can navigate a path in the new landscape as they decide how best to manage their healthcare needs.
As part of your presentation, you can give your customers additional resources to help them understand the new rules versus the old ones.
Healthcare Regulations in a State of Evolution
With new healthcare regulations being made every year, it’s challenging for people to grasp new rules meaningfully. Many of the new regulations only apply to providers and are of little significance to enrollees.
To complicate things even further, some of the rules don’t even apply until 2026 and beyond. There may also be different rules for federal exchange plans versus state-run plans.
As the new rules play out, the federal government will assess how well they serve plan participants. The government will almost certainly propose and possibly implement additional regulations in the coming years.
It’s never too soon to educate your customers about healthcare changes. As new developments occur, you have chances to contact your customers and keep the conversation going, which will give them increased confidence in your expertise.