Judge Partially Blocks Final Rule Affecting ACA Enrollment, Costs

A federal judge has temporarily blocked implementation of key provisions of a Trump administration rule that would impact enrollment and consumer costs in Affordable Care Act (ACA) health insurance marketplaces.

The final rule would tighten enrollment verification processes, adjust payment formulas, and change premium structures for the marketplaces. The Trump administration has said the changes would improve program integrity and reduce waste, fraud, and abuse.

The plaintiffs in a lawsuit challenging the rule, City of Columbus v. Kennedy, sought an emergency stay of eight of the rule’s provisions. On Friday, August 22, a federal district court judge in Maryland granted a nationwide stay barring the implementation of six of the provisions (the judge’s order states that the stay affects seven provisions, but this is apparently an error as only six are listed).

The six provisions the judge blocked would:

• Impose a $5 monthly premium for people who are automatically re-enrolled in marketplace plans via the federal marketplace platform, Healthcare.gov, and do not confirm their eligibility for $0 premiums. This provision would impact Arkansas enrollees because it applies to state-based health insurance marketplaces that use the federal platform, as Arkansas’s does.
• Impose more stringent income and identity verification processes. This provision would require additional income verification when an applicant’s attested income would qualify the person for marketplace subsidies (i.e., an income between 100% and 400% of the federal poverty level) but trusted data sources indicate the applicant’s income is below 100% of the federal poverty level.
• Allow insurers to cancel coverage for past-due premiums, despite the ACA’s requirement that health plans enroll all eligible applicants.
• Give insurers greater flexibility in designing marketplace plans by allowing plans to fall farther below metal-level actuarial value targets, i.e., the percentage of average annual medical costs that a health insurance plan covers. This could reduce premium tax credits and would allow insurers to offer less generous coverage, potentially with lower premiums.
• Require applicants to submit additional documentation to verify eligibility during special enrollment periods.
• Deny advance premium tax credits for individuals who do not file and reconcile their tax returns showing that their advance premium tax credits, which were based on estimated income, were justified by their actual income.

The judge did not block a provision in the rule that would raise maximum out-of-pocket and premium costs for plan enrollees or a provision that would eliminate an automatic 60-day extension of the time to resolve inconsistencies in household income data. The Center on Budget and Policy Priorities projects that premiums will rise in 2026 for the majority of the 22 million people who received marketplace subsidies in 2025.

The Centers for Medicare and Medicaid Services received over 26,000 public comments on the draft version of the rule. The agency has estimated that between 725,000 and 1.8 million people will lose coverage if the rule is implemented. In Arkansas, more than 166,000 individuals were enrolled in marketplace coverage in 2025.

These changes come at a time when Arkansas consumers are already facing the possibility of steep premium increases. Health insurers in the state are seeking average rate increases of 36.1% for individual health plans in the 2026 plan year, which would be the largest annual rate increase on record if approved.