Federal Judge Blocks ACA Rule Changes Affecting 1.8 Million Insured
A federal judge in Baltimore has issued a ruling to pause several provisions of an Affordable Care Act (ACA) regulation proposed by the previous administration, set to take effect on August 25, 2025. These provisions were projected to potentially affect 1.8 million Americans by causing loss of their health insurance coverage. The judge's suspension targets measures that would have introduced additional income verification requirements, allowed insurers to exclude enrollees with unpaid premiums, and imposed a $5 premium on certain consumers until eligibility for federal premium subsidies was verified.
This legal decision arises from a lawsuit initiated by a coalition of Democratic-led cities, which argued that the Centers for Medicare and Medicaid Services (CMS) exceeded its authority or violated federal law in implementing these measures. The ruling emphasizes the potential financial strain on city-run healthcare services and budgets due to an increase in uninsured or underinsured residents. The judge noted a significant risk of increased costs for insured individuals and a decline in care quality for the uninsured population if the provisions were enacted.
CMS finalized the rule in June, stating its purpose was to reduce improper enrollments and preserve the integrity of the ACA exchanges. However, while this ruling pauses key provisions, it allows other parts of the regulation to proceed. A parallel lawsuit by Democratic state attorneys general is also under review, signaling ongoing legal scrutiny over regulatory changes to the ACA.
The ruling underscores important considerations for insurance providers, payers, and policymakers regarding the balance between regulatory oversight to prevent fraud and ensuring accessible, affordable coverage. Additionally, the decision highlights the intersection of healthcare policy, legal authority, and the complexities of implementing regulatory changes within a highly structured federal framework. Stakeholders should monitor continuing litigation and potential adjustments in CMS policies that may impact market dynamics and consumer access to health insurance.