(CNN) A federal judge in Oregon has blocked the Trump administration from denying immigrants visas unless they can prove they will have health insurance.

Judge Michael Simon ruled that "the President's Proclamation requiring legal immigrants to show proof of health insurance before being issued a visa by the State Department is inconsistent with the INA," referring to the Immigration and Nationality Act.

Simon had previously temporarily barred the administration from implementing the policy, and has now granted a nationwide preliminary injunction pending resolution of the case.

The policy would require that visa applicants verify they would be covered by approved health insurance within 30 days of entry into the US or could "pay for reasonably foreseeable medical costs" -- a potential obstacle for immigrants, especially if they do not have the financial means. Accepted health insurance includes employer-sponsored and family coverage plans, unsubsidized individual health plans, and short-term plans -- but not Medicaid or Affordable Care Act subsidies.

Simon's order comes in a lawsuit filed by a group of US citizens who assert that the policy effectively serves as a new form of "family separation." In banning hundreds of thousands of immigrants from the United States, they argue, the rule could result in separating families who are immigrating via family-sponsored visas.

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