On Aug. 22, 2025, U.S. District Judge Brendan Hurson in Baltimore paused portions of the U.S. Department of Health and Human Services’ planned regulatory changes to the Affordable Care Act (ACA) marketplaces, days before the provisions were slated to take effect.
What Was Paused
Hurson halted implementation of nearly all challenged provisions of the Marketplace Integrity and Affordability Rule until a final ruling is issued. The paused elements include added fees and extra scrutiny affecting low-income enrollees. The implementation date had been scheduled for Aug. 25.
Who Challenged the Rule
The lawsuit was brought by the city of Chicago, the mayor and city council of Baltimore, and public health advocates. They argued the changes would add barriers and could lead to more than 2 million people losing coverage. In his ruling, Hurson said the challengers presented enough evidence that some provisions may conflict with the ACA.
Context on the Rule and the Market
The rule, finalized in June by the Centers for Medicare & Medicaid Services, was described by CMS as aimed at limiting improper enrollments and the improper flow of federal funds. The ACA created health insurance marketplaces, which are run by insurers such as UnitedHealth Group and CVS’s Aetna and provide income-based subsidies. Enrollment reached a record 20.8 million in 2024.
Chicago Mayor Brandon Johnson praised the ruling, saying it would help residents obtain reasonably priced coverage and reduce pressure on city health clinics that provide free care. An HHS spokesperson said the agency does not comment on pending litigation.
Market Reaction
Shares of major health insurers rose after the ruling: Centene up 2.25%, Elevance up 2.5%, Cigna up 2.3%, Molina up 2%, and UnitedHealth up 1.3%.
Additional Legal and Pricing Backdrop
The cities filed their lawsuit on July 1, asserting that the rule conflicts with the ACA and was improperly enacted. Separately, a group of Democratic state attorneys general has sued to block parts of the rule; that case is pending.
Insurers have recently reported higher medical costs in ACA plans, citing increased use of services by some members who anticipate leaving coverage in 2026. For next year, insurers are requesting the biggest premium increases for ACA plans since 2018, according to an analysis by KFF.
Source: Reuters, Diana Novak Jones, Aug. 22, 2025.
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