A federal judge has temporarily halted provisions of a rule from the Trump administration meant to reshape the Affordable Care Act exchanges, days before they were set to take effect. On Thursday, a Maryland district court determined that a coalition of cities and provider groups that filed a lawsuit challenging the rule would suffer “irreparable harm” from policies including the expansion of bare-bones catastrophic coverage and stricter verification of enrollees’ eligibility for subsidies.
Baltimore, Chicago, Columbus (Ohio), Pima County (Arizona), and the advocacy groups Doctors for America and Main Street Alliance brought the lawsuit last month. They argued that federal regulators at the Centers for Medicare & Medicaid Services violated the Administrative Procedure Act and the Affordable Care Act when they finalized the rule this spring, despite widespread opposition from the healthcare industry.
The complaint says the regulation will make it harder for Americans to access and pay for ACA coverage and will lower plan quality. According to CMS projections, up to 2 million people could lose their insurance as a result, which the plaintiffs argue would saddle them and their members with higher premiums and more uncompensated care costs.
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Judge pauses eight key provisions
Judge Brendan Hurson ruled Thursday that the plaintiffs appear likely to succeed on the merits of their argument that the CMS overstepped its rulemaking authority. He paused eight provisions of the rule while the case moves forward. Among them: a policy that would disqualify people who fail to reconcile tax credits with their income from receiving subsidies, and two policies imposing higher income verification standards when exchanges find inconsistencies in tax data or when that data isn’t available.
The judge also stayed the creation of stricter eligibility checks before a special enrollment period; the increase of maximum out-of-pocket payments for bronze plans; the elimination of standardized plan requirements; the relaxation of network adequacy standards; and the expansion of eligibility for catastrophic coverage — plans designed as coverage of last resort that can leave members vulnerable to very high costs. The changes were set to kick in on July 20 — a date that’s now on hold.
The same judge also stayed identical provisions in another ACA exchange rule last summer before officially vacating them last month.
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Insurers get temporary relief, but longer-term risks remain
The stay is a victory for insurers with an outsized presence on the exchanges, including Centene and Molina, which are already absorbing turbulence from the expiration of more generous subsidy boosts at the end of last year. Further membership losses from the Trump administration’s policies wouldn’t have helped, according to analysts.
The nonprofit Democracy Forward, which filed the lawsuit on the cities’ behalf, celebrated the ruling. “We are pleased that the court has stopped the president’s disastrous and harmful attempt to take healthcare away from working families, and remain committed to defending our democracy from these kinds of unlawful attempts to harm Americans,” Skye Perryman, Democracy Forward’s president and CEO, said in a statement.
