Judge Michael Simon, a district judge in Oregon, on Saturday granted a preliminary injunction against the proposal, the BBC reported.
Seven American citizens and an NGO had filed a lawsuit opposing the rule. They argued it would block hundreds of thousands of legal migrants.
The lawsuit said the number of immigrants who enter the US with family-sponsored visas would drop considerably, or be eliminated altogether.
Judge Simon said the potential damage to families justified a US-wide ban.
"Facing a likely risk of being separated from their family members and a delay in obtaining a visa to which family members would otherwise be entitled is irreparable harm," his legal order read.
Judge Simon's 28-day temporary restraining order will prevent the rule from coming into effect on November 3, but the legal battle was likely to continue.
The Trump administration has argued that legal immigrants were about three times more likely to lack health insurance than US citizens, and that taxpayers should not bear their medical costs.
However, US policy experts have said that immigrants were less likely to use the healthcare system than American citizens.
Research from George Washington University found that recent immigrants without insurance made up less than a tenth of 1 per cent of US medical fees in 2017.
( With inputs from IANS )