Judge partially blocks ACA enrollment rules set to take effect today

A Maryland judge blocked several parts of an Affordable Care Act exchange enrollment and eligibility rule on Friday, siding with a coalition of plaintiffs in a federal lawsuit.

The Trump administration rule was set to take effect today.

Judge Brendan A. Hurson found that plaintiffs – a coalition of Democratic mayors, liberal advocates and physicians -- “met their burden of showing that there is a strong likelihood that they will succeed on the merits of their challenges to seven provisions” of the rule.

Plaintiffs did not meet the burden of proof on two remaining provisions of the rule, the judge added.

“Plaintiffs have also shown they will face irreparable harm if the challenged portions of the Rule are not enjoined,” Hurson wrote. “Finally, the balance of equities and the public interest weigh in favor of a stay.”

The Centers for Medicare & Medicaid Services rolled out the changes last month, which include a shortened enrollment period, more stringent income verification checks, and a $5 fee for some people who automatically re-enroll in a free plan.

Insurers will also be able to deny coverage to people who have not paid their premiums on past plans. The rules also bar roughly 100,000 immigrants who were brought to the United States as children from signing up for the coverage.

The “Marketplace Integrity and Affordability” rule would result in more than 2.2 million Americans losing their health coverage, claimed Democracy Forward, the liberal advocacy group leading the litigation.

Key rule provisions blocked

Hurson temporarily blocked most of the contested provisions of the rule, including:

• A $5 fee for low-income individuals auto-enrolled into ACA plans who fail to verify their eligibility.
• Stricter eligibility verification requirements, which could make it harder for people to qualify for coverage.
• A provision allowing insurers to deny re-enrollment to individuals with unpaid premiums.
• Exclusion of gender-affirming care from essential health benefits.

Elements left untouched by Hurson's ruling include: modifying how cost-sharing limits are calculated or changes affecting the 60-day reconciliation extension window.

Plaintiffs include the mayors of Baltimore, Chicago and Columbus, Ohio and a pair of liberal groups -- Doctors for America and Main Street Alliance.

“Paying more for less is always a bad deal, but that’s exactly what the president is proposing for health care coverage—a bad deal for working people, families, and cities that rely on the Affordable Care Act to decrease costs and increase accessibility,” said Columbus City Attorney Zach Klein.

In finalizing the rule, CMS officials said it will lower individual health insurance premiums by about 5% on average. It is also projected to save taxpayers up to $12 billion in 2026 by “combating the surge of improper enrollments in the [ACA],” the CMS said in a news release.

Filed in U.S. District Court for the District of Maryland, the lawsuit alleges violations of the Administrative Procedure Act. That is an important distinction as the plaintiffs sought a nationwide injunction preventing the rule from taking effect.

Injunctions curtailed

In a June ruling, the Supreme Court declared that lower-court universal injunctions "likely exceed the equitable authority that Congress has granted to federal courts." However, that decision left an exception in place for APA challenges.

The CMS rule limits ACA enrollment to Nov. 1 to Dec. 15 in 2026, a reversal of the Biden administration’s approach. The previous administration expanded the enrollment window, which led to record enrollment of more than 24 million.

Plaintiffs say that the new policies were introduced without an adequate public comment period on the proposals.

CMS published a proposed version of the rule on March 19, 2025, and received more than 26,000 comments, despite a shortened 23-day (rather than 30-day) formal comment period, the lawsuit said.

“This unlawful rule will force families off their health insurance and raise costs on millions of Americans. This does nothing to help people – and instead harms Americans’ health and safety across our country,” said Skye Perryman, president and CEO of Democracy Forward. “Americans deserve a government that protects their health, not one that puts it at risk.”

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.