On July 8, the U.S. District Court for the District of Maryland heard oral argument in City of Columbus v. Kennedy (Columbus II), which challenges CMS’s 2027 Notice of Benefit and Payment Parameters Final Rule (NBPP final rule). Following argument, the Court directed the parties to file supplemental briefs on two questions: whether relief could be implemented without unduly disrupting the Marketplace for the 2027 plan year, and whether staying the catastrophic-plan guidance would affect people currently enrolled in that coverage.
The Defendant argues that reinstatement of standardized plan requirements would be impracticable. Their supporting declaration, from CCIIO Deputy Director for Policy Jeff Wu, states that CMS never developed updated standardized plan designs for 2027 since the policy had already been discontinued, and warns that compressing the certification timeline now risks operational errors, blocked plans, or issuer withdrawals. Wu also flags technical hurdles to restoring differential plan display on HealthCare.gov and estimates that reinstating the non-standardized plan limit would force issuers to drop 12–21% of offerings. On catastrophic coverage, the Defendant argues that staying the rule and retroactively removing individuals from catastrophic coverage would create significant administrative and consumer harms. Wu reports that roughly 20,025 consumers are currently enrolled in catastrophic coverage under the expanded eligibility rule, against just 630 hardship exemptions approved overall from January through May.
Plaintiffs counter that reinstatement is feasible. They argue CMS can update standardized-plan cost-sharing parameters through sub-regulatory guidance rather than new rulemaking, pointing to comparably tight turnarounds the agency and insurers absorbed after the 2017 cost-sharing-reduction cutoff and twice more in 2025. Their declarant, former CCIIO Deputy Director for Operations Jeffrey Grant, states that CMS could update 2026 plan designs via its AV Calculator within days to weeks, notes that 59% of 2027 standardized plans are already submitted for certification, and says HealthCare.gov’s display functionality is already built and running. On catastrophic coverage, Plaintiffs argue a stay wouldn’t force current enrollees out of their plans, since CMS could use enforcement discretion, as in past litigation, to let them keep coverage through year-end while blocking new sign-ups under the challenged standard.
We expect a decision from the Court next week and will continue monitoring for updates.
For more information on the NBPP final rule and Columbus II litigation, see our prior publications:
- HHS Files Opposition in Columbus II Litigation, Michelle Koltov, Lisa Campbell
- CMS Issues 2027 HHS Notice of Benefit and Payment Parameters Final Rule | Groom Law Group
- City of Columbus et al. Challenge Provisions of the HHS 2027 Payment Notice Final Rule, Michelle Koltov, Lisa Campbell
- The Friday Evening Surprise: CMS Releases the 2027 Payment Notice Final Rule, Michelle Koltov, Lisa Campbell
