BALTIMORE, Maryland — In a significant blow to the Trump administration’s efforts to overhaul the Affordable Care Act (ACA), U.S. District Judge Brendan Hurson in Maryland issued a preliminary injunction on August 22, 2025, blocking key provisions of newly finalized Marketplace rules just days before their scheduled implementation. The ruling, stemming from a lawsuit filed by a coalition of cities including Columbus, Ohio, Baltimore, and Chicago, has plunged health insurers into uncertainty as they prepare for the 2026 open enrollment period. While some aspects of the rules remain intact, the halt on enrollment and verification changes raises questions about compliance, pricing, and coverage accessibility, potentially affecting millions of Americans relying on ACA subsidies.
The decision came in response to arguments that the U.S. Department of Health and Human Services (HHS) violated the Administrative Procedure Act (APA) by issuing the rules without adequate notice and comment periods. Plaintiffs, including trade groups, small business advocates, and municipal leaders, contended that the measures would impose bureaucratic hurdles, surprise costs on consumers, and undermine coverage standards. “This ruling will help our residents obtain reasonably priced health insurance and reduce the burden on our health clinics to provide free care,” Chicago Mayor Brandon Johnson said in a statement praising the injunction.
The rules, finalized by the Centers for Medicare & Medicaid Services (CMS) in June 2025 and set to take effect on August 25, aimed to enhance “program integrity” in the ACA Marketplace. Key blocked provisions include:
- Elimination of Monthly Special Enrollment Periods: For certain individuals, such as those qualifying due to income changes or life events, monthly enrollment windows would have been curtailed, potentially delaying access to coverage.
- Tightened Income Verification: Stricter requirements for verifying eligibility for premium tax credits (PTCs), which could lead to more denials or appeals for low-income applicants.
- Standardization of Open Enrollment: Uniform dates and processes across states, intended to reduce fraud but criticized for limiting flexibility in state-based exchanges like Maryland’s Maryland Health Connection.
- $5 Monthly Premium for Auto-Reenrollees: A new charge for individuals automatically reenrolled in zero-premium plans, which opponents argued would create unexpected costs for subsidized enrollees.
Other elements, such as excluding Deferred Action for Childhood Arrivals (DACA) recipients from the definition of “lawfully present” for Marketplace eligibility, were not immediately affected but remain under scrutiny in separate litigation. A parallel lawsuit by 20 Democratic-led states in the District of Massachusetts is ongoing, suggesting the rules face a rocky road ahead.
Background: The Trump Administration’s ACA Overhaul
The blocked rules are part of a broader push by the Trump administration to roll back Biden-era expansions of the ACA, focusing on what officials describe as curbing abuse and ensuring fiscal sustainability. HHS argued the changes would prevent “adverse selection” by tying enrollment more closely to open periods and verifying incomes to avoid overpayments of PTCs, which have surged since enhanced subsidies were enacted in 2021 under the American Rescue Plan. However, critics, including the cities’ coalition, claimed the rulemaking process was rushed and arbitrary, bypassing required public input and conflicting with the ACA’s core goal of expanding access.
The lawsuit, filed on July 1, 2025, in the U.S. District Court for the District of Maryland, highlighted procedural flaws and potential harm to vulnerable populations. Judge Hurson, in his ruling, found that the plaintiffs had demonstrated a likelihood of success on APA claims, stating they presented “enough evidence that some of the rule’s provisions run afoul of the ACA.” HHS did not immediately comment on the decision, citing pending litigation.
This isn’t the first legal challenge to ACA rules under Trump. Earlier efforts, such as attempts to exclude DACA recipients from coverage, have faced similar injunctions, and a December 2024 ruling blocked ACA enrollment for DACA individuals following a lawsuit by 19 state attorneys general. The administration’s “One Big Beautiful Bill,” passed by the House in May 2025, further complicates the landscape by proposing cuts to Medicaid and ACA subsidies set to expire at year’s end, prompting insurers to seek average 17% premium hikes for 2026 in states like Maryland.
Industry Reactions: Uncertainty for Insurers and Consumers
Health insurers, already grappling with rising medical costs and a projected smaller, sicker enrollee pool for 2026, welcomed the pause but expressed frustration over the ongoing flux. America’s Health Insurance Plans (AHIP), the national trade association, stated that “frequent shifts in ACA regulations create instability for consumers and insurers alike,” emphasizing the need for predictable rules to finalize 2026 rates and plan designs. A spokesperson added, “Clarity is essential as we work to ensure affordable and sustainable coverage.”
The Blue Cross Blue Shield Association echoed this, noting that verification and reenrollment standards must balance program integrity with accessibility to avoid disenrolling eligible individuals. Insurers like UnitedHealth, Centene, and Elevance saw share prices rise 1.3% to 2.5% following the ruling, reflecting market relief from immediate implementation pressures. However, the limbo could delay rate filings—due soon for the November 1 open enrollment—and force adjustments if the injunction is lifted or modified.
For consumers, the uncertainty means potential delays in understanding subsidy eligibility and enrollment options. In Maryland, where about 76% of Marketplace enrollees receive subsidies averaging $404 monthly savings, the ruling preserves current special enrollment flexibilities but leaves questions about future costs. State regulators, including Maryland Insurance Commissioner Marie Grant, have warned that without extensions of enhanced subsidies, premiums could spike 17% on average, affecting thousands.
A separate analysis by KFF indicates insurers are requesting the largest ACA premium increases since 2018, anticipating higher utilization as members front-load services before possible 2026 changes. This could exacerbate affordability issues, particularly in states without robust reinsurance programs like Maryland’s, which has helped stabilize rates since 2019.
| Key Blocked Provision | Potential Impact | Status |
|---|---|---|
| Elimination of Monthly Special Enrollment Periods | Could delay coverage for life-event qualifiers, increasing uninsured periods | Halted; current rules apply |
| Tightened Income Verification | Risk of subsidy denials or appeals for low-income applicants | Halted; existing verification processes remain |
| Standardization of Open Enrollment | Limits state flexibility, potentially complicating local exchanges | Halted; state variations preserved |
| $5 Auto-Reenrollment Premium | Introduces costs for zero-premium plans, affecting subsidized users | Halted; no new fees for now |
| DACA Exclusion from “Lawfully Present” | Bars ~100,000 from Marketplace eligibility | Not blocked in this ruling; separate challenges ongoing |
Broader Implications for ACA and U.S. Health Policy
The injunction underscores the precarious state of the ACA under the Trump administration, which has prioritized deregulation and cost controls amid expiring subsidies and proposed Medicaid cuts. For American families, particularly the 21 million enrolled in Marketplace plans, the ruling averts immediate disruptions but highlights the fragility of coverage gains. Without stable rules, enrollment could drop, premiums rise, and access to care suffer—reversing progress in reducing the uninsured rate to historic lows.
Legal experts anticipate appeals, with the case potentially reaching higher courts. A similar suit by Democratic attorneys general could yield conflicting rulings, further muddying the waters. As one industry analyst noted, “This limbo isn’t just administrative—it’s a threat to the Marketplace’s viability.” For U.S. policymakers and voters, the decision serves as a reminder of the ACA’s enduring legal battles, where judicial intervention often determines the fate of health security for millions.