A federal judge late last week struck down a number of key provisions of the 2025 Marketplace Integrity and Affordability Final Rule from the Centers for Medicare & Medicaid Services. Maryland District Judge Brendon Hurson ruled that CMS could not use its general rulemaking authority to override explicit statutory provisions.
CMS issued the rule to strengthen oversight of Affordable Care Act exchanges, reduce improper enrollments and address fraud concerns. The rule faced widespread legal challenges from cities, patient advocacy groups and small-business organizations, which argued it violated the Administrative Procedure Act and would harm coverage access.
The judge's ruling vacated these provisions:
- The $5 automatic reenrollment penalty;
- The policy revoking coverage for those with past-due premiums;
- The shortened 2027 enrollment period;
- New eligibility verifications for special enrollment periods; and
- The elimination of the 60-day income correction window.
Hurson allowed the premium adjustment methodology changes, which he found supported by the rule's statutory basis, to stand. The ruling stops enforcement of the most controversial enrollment and eligibility changes, potentially preserving coverage for millions of ACA enrollees. However, the underlying statutory and policy issues remain, and the rule's other elements (such as premium adjustments) may still apply. The changes, combined with the expiration of enhanced premium tax credits, already have driven higher premiums and reduced enrollment in some areas, Fierce Healthcare reported.
The conservative Paragon Institute argued that millions of improper ACA enrollments have driven up the cost of government subsidies for ACA Marketplace plans.
"We estimate that approximately 6.2 million sign-ups in 2026 were improper, representing 27% of all 2026 open enrollment sign-ups," according to the organization. "These improper enrollments could lead to as much as $25 billion in improper subsidy expenditures in 2026, nearly one-quarter of projected federal exchange subsidy spending."
Other health policy experts said these estimates likely are inflated.
"Under the auspices of, 'We have to go after fraud and improper enrollment' -- which yes, was well-documented last year, there was a lot of fraud from a handful of unscrupulous brokers -- instead of going after the brokers who are guilty of this, this rule does nothing to prevent that behavior," said Sabrina Corlette, the co-director of the Center on Health Insurance Reforms at Georgetown University.
Democracy Forward, a nonprofit group, filed a lawsuit challenging the rule on behalf of the cities of Chicago, Baltimore and Columbus, Ohio, along with the physician advocacy organization Doctors for America and small-business lobbying group Main Street Alliance.
Although the ruling is considered a victory for backers of expanded ACA coverage, many of the changes that were struck down were codified in the One Big Beautiful Bill enacted last summer.
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