A federal judge in the U.S. District Court of Maryland temporarily blocked several provisions of a recently finalized rule that would change Affordable Care Act (ACA) marketplaces beginning July 20.
The lawsuit was filed in June by a group of municipalities: Columbus, Ohio; Chicago; Baltimore and Pima County, Arizona—as well as Doctors for America and the Main Street Alliance. It challenged a dozen provisions of the rule.
In the complaint, the plaintiffs argued that, while the rule aims to make care more affordable and manage administrative overhead, “the rule accomplishes the opposite,” creating “numerous” barriers to coverage rather than making it easier to secure a plan. The complaint argued the effects of the Centers for Medicare and Medicaid Services (CMS) final rule are “directly contrary to the landmark legislation” due to the potential coverage losses.
They also argued that CMS violated the Administrative Procedure Act and the Affordable Care Act.
Judge Brendan Hurson ruled on Thursday that the plaintiffs are likely to succeed on the merits of their challenges to certain provisions of the rule and the coalition showed they “will face irreparable harm” from the policies.
Hurson paused eight provisions of the rule, including the expanded hardship exemption; revised network adequacy standards; updated bronze plan cost-sharing methodology and elimination of standardized plans. A memo of Judge Hurson’s order can be found here (PDF download).
The rule, which was finalized in mid-May, expands access to catastrophic and non-network plans as lower-cost alternatives, rolls back previously established limits on non-standard plan designs and institutes new cost-sharing guidelines for bronze-tier and catastrophic plans.
CMS said the rule aims to crack down on fraud and give states greater marketplace control, but industry groups expressed concerns of unexpectedly high costs as a result.
Recent federal data shows 19.2 million individuals were enrolled in the ACA marketplace as of February, representing a 3 million drop from 2025.
An analysis from KFF found enrollment is likely to continue to decrease, with estimates projecting it could reach an average of 17.5 million individuals by the end of 2026.