UnitedHealth and Peers Receive Relief as Judge Blocks ACA Rule Changes

A federal judge has temporarily blocked the Trump administration's changes to the Affordable Care Act health insurance marketplace, providing relief to major health insurers like UnitedHealth Group (UNH) and peers facing rising costs. The ruling comes just days before the new regulations were set to take effect on August 25. The changes aimed to tighten eligibility and reduce improper enrollments, but the pause gives insurers more time to adjust prices and coverage without rushing to meet new rules. UnitedHealth may be worth a look for long-term investors, with a Strong Buy consensus rating and a 2.82% upside potential.

A federal judge in Baltimore has temporarily blocked portions of the U.S. Department of Health and Human Services' (HHS) planned regulatory changes to the Affordable Care Act (ACA) health insurance marketplace. The ruling, issued by U.S. District Judge Brendan Hurson, comes just days before the new regulations were due to take effect on August 25. The pause provides relief to major health insurers like UnitedHealth Group (UNH) and others facing rising costs [1].

The judge's decision follows a challenge brought by the city of Chicago, the mayor and city council of Baltimore, and public health advocates. They argued that the changes would result in more than 2 million people losing their health insurance coverage by increasing fees and imposing other barriers. The paused provisions include added fees and extra scrutiny on low-income enrollees seeking insurance [1].

The HHS rule, finalized in June, aimed to limit improper enrollments and the improper flow of federal funds. However, the judge found that the states had put forward enough evidence that some of the rule's provisions run afoul of the ACA. Chicago Mayor Brandon Johnson praised the ruling, stating that it will "help our residents obtain reasonably priced health insurance and reduce the burden on our health clinics to provide free care" [1].

The pause gives health insurers more time to adjust prices and coverage without rushing to meet new rules. Shares of health insurers, including Centene (CNC), Elevance, Cigna (CI), Molina, and UnitedHealth, rose in afternoon trade following the ruling. Health insurers have been struggling with rising medical costs in their ACA plans, in part due to some members increasing their use of services in anticipation of dropping out of coverage in 2026 [1].

The ruling is a significant setback for the Trump administration's efforts to tighten eligibility and reduce improper enrollments in the ACA marketplace. The pause may also impact the Biden administration's plans to expand access to affordable healthcare, as the changes were meant to address some of the challenges faced by the ACA marketplace.

References:
[1] Reuters. (2025, July 2). Judge pauses portion of US changes to ACA insurance. Investing.com. Retrieved from https://www.investing.com/news/general-news/judge-pauses-portion-of-us-changes-to-aca-insurance-4207303