CMS is expanding eligibility for catastrophic health coverage on the ACA marketplace in 2026.
The agency issued new hardship exemption guidance on Sept. 4 aimed at individuals projected to be ineligible for advance premium tax credits or cost-sharing reductions due to their annual household income. Those consumers will qualify for a hardship exemption, allowing them to purchase catastrophic plans either on or off the exchange.
Amid the looming expiration of enhanced premium tax credits at the end of 2025 and rising medical costs, insurers nationwide have requested a median 15% rate increase for 2026.
CMS said the eligibility changes are designed to ensure people who cannot access subsidies still have an affordable option.
Catastrophic plans cover all essential health benefits required under the ACA, provide preventive care without cost sharing, and are designed to protect consumers from large medical bills. Premiums are lower than standard marketplace plans, though catastrophic coverage has typically been limited to people under 30.
CMS will begin streamlining the application process Nov. 1.
