A federal judge in Massachusetts denied a bid by a coalition of 21 Democratic-led states to halt new ACA rules they argue will impose significant barriers to receiving health coverage.
The lawsuit was filed in July challenging a final rule that CMS introduced earlier this year to amend ACA marketplace regulations, which the states argued will lead to millions of people losing access to health insurance, raise costs for states, and reduce the availability of essential health benefits.
The coalition, which includes California, Illinois and New York, sought preliminary relief to prevent the rule from taking effect as planned.
The rule, which went into effect Aug. 25, is projected by CMS to cause up to 1.8 million people to lose coverage. It aims to implement stricter verification requirements for eligibility, shorten open enrollment periods, and eliminate coverage for gender-affirming care as an essential health benefit.
The coalition argued that the rule is “arbitrary and capricious” and would place undue financial strain on state health programs, including Medicaid programs. The states also argued that the rule would increase costs by forcing them to provide more healthcare services to newly uninsured individuals, adding to Medicaid spending and costs for emergency care.
U.S. District Judge Nathaniel Gorton said in his Oct. 1 opinion that the states did not adequately show imminent, irreparable harm. He said several states “exaggerate the extent of the predicted decrease in enrollments,” noting that the 1.8 million figure is at the high-end of CMS’ estimate. He said that the final rule notes that coverage losses are expected to be concentrated in nine states, and none of those states are part of the lawsuit. He also said that the states were unlikely to incur immediate costs from the implementation of the rule.
