Federal Judge Blocks Key Provisions of New ACA Marketplace Rule
A federal judge has issued a preliminary injunction blocking key provisions of the Centers for Medicare & Medicaid Services (CMS) Marketplace Integrity and Affordability Rule, originally slated to begin on August 25. The halted measures include stricter eligibility verifications for Affordable Care Act (ACA) enrollees and limitations on premium subsidies. The judge emphasized concerns that these provisions could lead to the loss of coverage for approximately 1.8 million people, potentially increasing costs for remaining insured populations and diminishing care quality for the uninsured.
The CMS rule aims to reduce improper enrollments and fraud in the ACA marketplace, anticipated to lower individual premium costs by roughly 5% and generate about $12 billion in savings in 2026. Key changes include ending the monthly special enrollment period for those earning under 150% of the federal poverty level and shortening the open enrollment period to December 31 instead of January 15 for 2027. However, opposition from a coalition representing cities, small businesses, and healthcare providers argues these policies will increase the uninsured rate and place additional burdens on local healthcare systems due to uncompensated care demands.
The judge found that CMS had insufficiently justified the rule’s provisions, ruling that implementation was likely arbitrary and failed to meaningfully assess how tightened income verifications would disproportionately impact low-income applicants. Additionally, the court paused enforcement of requirements that block re-enrollment for individuals with unpaid premiums and exclusions of gender-affirming care from essential health benefits. This ruling highlights evolving judicial scrutiny over administrative policy changes impacting ACA marketplace operations.
This legal challenge coincides with a separate lawsuit from a coalition of 21 states opposing similar ACA rule provisions. The ongoing litigation signals a complex regulatory and compliance environment for ACA insurers, providers, and policymakers navigating efforts to combat enrollment irregularities while maintaining coverage accessibility.
Stakeholders in the healthcare insurance market should monitor upcoming court reviews and the ultimate determination on the CMS rule, as outcomes will influence marketplace eligibility standards, subsidy structures, and risk management strategies in the ACA ecosystem. These developments underscore the ongoing tension between integrity enforcement and ensuring equitable access to coverage under health reform laws.