Democrats recently notched a win when it comes to the Affordable Care Act Marketplaces.
A federal district judge in Baltimore issued a stay in August on several provisions of the Trump administration’s Marketplace Integrity and Affordability Rule. The rule aimed to reduce fraud, waste and abuse in the Affordable Care Act Marketplaces, but would have also led to significant coverage losses (up to 1.8 million people). It would tighten eligibility verifications for ACA plans, shorten the annual open enrollment period, prohibit subsidies to ACA plans for gender-affirming care, among other changes.
U.S. District Judge Brendan Hurson’s decision came just a few days before the rule was supposed to take effect. The lawsuit challenging the rule was filed by the cities of Columbus, Baltimore and Chicago, as well as Doctors for America and Main Street Alliance (a network of small business owners). They argued the rule violates the Administrative Procedure Act, which governs the process by which federal agencies can create regulations. The court found that the plaintiffs would likely succeed on their challenges to several provisions.
Democracy Forward, a legal organization that represented the plaintiffs, applauded the decision, stating that it protects healthcare for millions of Americans.
“The Trump-Vance administration is making life harder for working Americans,” said Skye Perryman, president and CEO of Democracy Forward. “It should be doing everything possible to increase access to affordable health care, but this administration seems intent on making accessing basic health care harder. We are pleased the court has stepped in, and we will continue to pursue this case to ensure that the Affordable Care Act fulfills its promise of affordable, accessible health care for all.”
This lawsuit is separate from a similar lawsuit filed by a group of Democratic attorneys general. A decision has not been made on that lawsuit yet.
The judge’s ruling
Specifically, Hurson issued a stay on seven of the nine provisions challenged by the plaintiffs. This means that these provisions cannot go into effect until the judge issues a final ruling, or if Hurson’s ruling is appealed and reversed.
He noted that several of the provisions of the Marketplace Integrity and Affordability Rule are either not authorized by the Affordable Care Act and are contrary to law, or are “arbitrary and capricious.” The latter means the agency didn’t adequately explain its rationale for these provisions.
The provisions he issued a stay on include:
- The requirement for Marketplaces to automatically re-enroll consumers who haven’t updated their eligibility information into plans with a $5 monthly premium instead of fully subsidized coverage
- The provision allowing insurers to demand payment of past-due premiums before issuing new coverage
- The rule cutting off premium subsidies for people who didn’t reconcile past tax credits
- The provision requiring additional documentation to verify eligibility for special enrollment periods
- Two income verification requirements requesting additional documentation for applicants with very low income or no tax records to confirm their reported income
- The provision giving insurers more flexibility in how generous their health plans are by loosening the rules around actuarial value, or the percentage of costs a plan covers
“The Court finds that Plaintiffs have met their burden of showing that there is a strong likelihood that they will succeed on the merits of their challenges to seven provisions of the Rule. … Plaintiffs have also shown they will face irreparable harm if the challenged portions of the Rule are not enjoined,” the judge wrote. “Finally, the balance of equities and the public interest weigh in favor of a stay.”
The judge did not issue a stay for two other provisions, which will go into effect. These include CMS’s changes to the premium adjustment percentage methodology and its decision to revoke the 60-day extension for resolving data matching issues.
There are also some provisions that weren’t challenged by the plaintiffs, such as the exclusion of Deferred Action for Childhood Arrivals (DACA) recipients from Marketplace coverage. The DACA program protects young adults without U.S. citizenship or legal status from deportation. These young adults were minors who accompanied their parents or other family members when the latter illegally crossed the border. While they had certain protections under Democratic administrations, Republicans under the Trump administration have sought to remove those protections.
What’s ahead?
The Trump administration has appealed the district court’s decision to the Fourth Circuit Court of Appeals.
However, it’s unlikely that the appeals court will make a decision ahead of the open enrollment period, which starts on November 1.
“These can’t move forward until there’s either some resolution of an appeal or this federal trial board makes a final decision on the issue,” said Kaye Pestaina, director of KFF’s Program on Patient and Consumer Protection, in an interview. “So there is a chance that these might not be implemented when they were supposed to be effective, but we’ll see how fast the courts move and what happens next.”
At least one patient advocacy organization hopes that the delayed provisions are permanently blocked.
“The rule is another one of the Trump administration’s unlawful and harmful attacks on health care that creates significant hurdles for families and individuals – mainly immigrant and marginalized communities – to access health insurance through the Affordable Care Act,” said Sophia Tripoli, senior director of health policy at Families USA. “It significantly undermines the ACA’s intended purpose and reverses the record health coverage gains made over the past few years.”
If the complete rule does go into effect, it could cause significant harm, especially when combined with changes in the One Big Beautiful Bill Act and the expiration of the ACA enhanced premium tax credits at the end of this year. That said, it’s possible Congress may issue an extension to the tax credits.
“All these factors are working together to drive premiums higher next year and to drive enrollment lower,” said Louise Norris, health policy analyst with healthinsurance.org. “But some of it is still up in the air, like this marketplace rule where all these provisions have been stayed. We don’t know when the court ruling will eventually come, and we don’t know what it will say, and then, obviously, we don’t know what Congress will do as far as extending the subsidy enhancement.”
While the future remains uncertain for those enrolled through the ACA Marketplaces, it’s clear that this year’s open enrollment period is likely to be marked by significant confusion. The Democrats may have notched a victory with the judge’s ruling but it may only be a temporary win.
Photo: kroach, Getty Images
