A federal judge has vacated several key components of a controversial 2025 program integrity rule for the Affordable Care Act's marketplaces.
In an order issued Friday, Maryland District Judge Brendon Hurson tossed multiple elements of the regulation, including a $5 penalty for automatic re-enrollments and an element that would revoke guaranteed coverage for people who have past-due premiums.
In addition, the court vacated a shortened enrollment period for the 2027 plan year, new eligibility verifications for special enrollment periods and plans to eliminate a 60-day extension that would allow individuals to address inconsistencies in household income, per the court filing.
Hurson had issued a stay on multiple provisions of the rule late last year following the legal challenge from multiple U.S. cities and patient advocacy groups.
"The agency cannot utilize its general rulemaking authority to override·explicit statutory provisions," Hurson wrote.
While he did vacate multiple central elements of the 2025 rule, Hurson allowed to stand changes to the methodology that the Centers for Medicare & Medicaid Services (CMS) uses to calculate premium adjustments, saying that the rule did successfully support the argument for those updates.
Regulators at CMS said that the rule is intended to address what they argue is rampant fraud on the exchanges, particularly the federal exchange, Healthcare.gov. Research from the right-leaning think tank Paragon Health Institute estimates that 5 million individuals may have been improperly enrolled in ACA plans in 2025 alone.
The program integrity changes alongside the expiration of enhanced premium tax credits for exchange enrollees have had major impacts on insurers operating in this market.
Similar changes finalized in a regulation last month have also drawn ire, with a group of cities suing last week to block the rule.
The regulation for the 2027 plan year aims to roll back limits on non-standard plans and expand access to catastrophic and non-network plans as a solution to help mitigate rising premiums.