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HHS and CMS appealed a Maryland federal court’s decision to vacate parts of CMS’s 2025 “Marketplace Integrity and Affordability Rule,” according to July court filings, marking the latest turn in a case where HHS appeals ACA marketplace rule provisions that a lower court had already struck down.
What the Court Vacated Before HHS Appealed the Marketplace Rule
In the case, which has the city governments of Columbus, Ohio, Baltimore and Chicago, as well as other groups, as plaintiffs, the Maryland district court ruled on summary judgment in June 2026 to vacate most of the rule’s challenged provisions. Those included a $5 premium penalty on automatic re-enrollees, a past-due-premium coverage policy, special enrollment period eligibility verification requirements, the failure-to-reconcile policy, income verification policies, de minimis actuarial value range changes, a shortened open enrollment period leading up to the 2027 coverage year, and the revocation of a 60-day extension to resolve income inconsistencies.
A Long Legal History Behind This Case
Judge Brendan Hurson had previously paused portions of the rule in August 2025. Shortly after the June 2026 ruling, the appellate court dismissed an appeal from that previous August. As part of the August appeals process, the government had originally filed an emergency stay motion regarding the rule’s actuarial value provision but was unsuccessful.
Why HHS Is Appealing the Marketplace Rule Decision Now
Now, the case is back before the 4th Circuit Court of Appeals. On July 22, the government filed a motion to expedite the appeal, with a decision from the court requested by Dec. 31 “to avoid potential mootness.” Several of the rule’s elements, such as the failure-to-reconcile component, had been designed to sunset at the end of 2026, creating urgency behind the government’s request for a faster ruling.
CMS’s Statement on the Appeal
“This kind of litigation has real consequences for the American people. The court’s order delays implementation of commonsense reforms designed to protect consumers, strengthen marketplace integrity and ensure taxpayer-funded premium subsidies are directed to individuals who are eligible under the law,” a CMS spokesperson told Becker’s. “CMS will comply with the court’s order while continuing to pursue policies that improve affordability, accountability and program integrity.”
How This Case Fits a Broader Wave of Marketplace Litigation
The case, sometimes called Columbus I, is part of a wave of litigation pushing back against the Trump administration’s attempt to overhaul the exchange marketplace. A similar lineup of plaintiffs filed another lawsuit, sometimes referred to as Columbus II, in June 2026 that focuses on the healthcare rule for 2027, which contains some aligned provisions.
The Same Judge Overseeing a Related Case
Hurson is also overseeing that case and blocked several provisions earlier in July, meaning the same judge is currently weighing challenges to two related but distinct marketplace rules simultaneously.
What This Means for the Marketplace Going Forward
With the government now seeking an expedited Fourth Circuit ruling by year’s end, the outcome of this appeal could determine whether several marketplace integrity provisions, some of which were set to sunset at the end of 2026 regardless, ever take effect as originally designed. Given that Hurson is simultaneously overseeing the related Columbus II litigation challenging the 2027 marketplace rule, the resolution of both cases together will likely shape the regulatory landscape for enrollment verification, income reconciliation, and premium subsidy eligibility rules heading into the next several plan years.
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