A federal judge has temporarily blocked major portions of the U.S. Department of Health and Human Services’ planned changes to the Affordable Care Act (ACA) health insurance marketplace, just days before they were set to take effect.
U.S. District Judge Brendan Hurson in Baltimore sided with a lawsuit brought by the city of Chicago, Baltimore’s mayor and city council, and public health advocates. They argued the changes could cause more than 2 million people to lose their health insurance by raising fees and creating additional barriers to enrollment.
Hurson’s ruling halts nearly all provisions of the Marketplace Integrity and Affordability Rule challenged by the cities, including new fees and stricter scrutiny of low-income applicants. These provisions had been scheduled to take effect on August 25.
The rule, finalized by HHS’s Centers for Medicare & Medicaid Services (CMS) in June, was designed to prevent improper enrollments and the misuse of federal funds, according to CMS.
The ACA, former President Barack Obama’s signature domestic policy, created the health insurance marketplaces. Companies such as UnitedHealth Group, CVS’s Aetna, and others manage these marketplaces and provide income-based subsidies. Enrollment in 2024 reached a record 20.8 million people.
During his first term, President Donald Trump attempted to repeal Obamacare but was unsuccessful.
In his ruling, Hurson said the cities had provided sufficient evidence that some of the rule’s provisions may violate the ACA.
Chicago Mayor Brandon Johnson praised the decision, saying it will “help our residents obtain reasonably priced health insurance and reduce the burden on our health clinics to provide free care.”
An HHS spokesperson declined to comment, citing pending litigation.
The ruling also lifted stocks of health insurers in afternoon trading, with Centene up 2.25%, Elevance 2.5%, Cigna 2.3%, Molina 2%, and UnitedHealth 1.3%.
Insurers have faced rising medical costs in ACA plans recently, partly due to higher usage by members anticipating potential coverage changes in 2026.
The cities filed their lawsuit on July 1, arguing the rule conflicted with the ACA and was improperly enacted. Separately, a group of Democratic attorneys general has also sued to block parts of the rule, with that case still pending.
For 2025, insurers are requesting the largest premium increases for ACA plans since 2018, anticipating a smaller and sicker pool of enrollees, according to health research firm KFF.
