WASHINGTON — In an abrupt reversal, the Trump administration said Tuesday that it would restart a program that pays billions of dollars to insurers to stabilize health insurance markets under the Affordable Care Act.

The administration suspended the program less than three weeks ago, saying it was compelled to do so by a federal court decision in New Mexico.

But on Tuesday the administration said it would restore the program because otherwise health plans could become insolvent or withdraw from the market, causing chaos for consumers.

The administration essentially accepted the arguments of critics, including consumer groups, insurance companies, and Democrats in Congress, who said that suspending the payments would cause turmoil.

The program, known as risk adjustment, makes payments to insurers that enroll higher-risk people, such as those with chronic conditions. The money comes from insurers that enroll healthier people. The purpose of the cash transfers is to reduce incentives for insurers to avoid sicker patients.

Seema Verma, administrator of the Centers for Medicare and Medicaid Services, who issued the new rule Tuesday, said it would “restore operation of the risk adjustment program and mitigate some of the uncertainty caused by the New Mexico litigation.’’

Health plans that had “expressed concerns about having to withdraw from markets or becoming insolvent should be assured by our actions today,’’ Verma said. “Alleviating concerns in the market helps to protect consumer choices.’’

Payments will resume around Oct. 22, the Department of Health and Human Services said. If payments are not made, it said, “there is a serious risk’’ that insurers will substantially increase premiums in 2019. Higher premiums could make coverage unaffordable for some consumers, especially those who do not qualify for subsidies, it said.

Republicans in Congress, afraid of being blamed in the midterm elections this year for even higher premiums, had urged the Trump administration to resume the payments.

In February, Judge James O. Browning of US District Court in Albuquerque voided the formula used by the government to calculate risk adjustment payments. He said the formula was flawed because federal officials “assumed erroneously’’ that collections and payments had to offset each other.

The Trump administration said it would use the exact same formula for the next round of risk adjustment payments. But it provided a fuller explanation of its method of calculating the payments, as Browning had requested. The administration did not change the formula to address the substantive concerns of the judge or the insurance company that filed the lawsuit, New Mexico Health Connections. So it is unclear whether they will be satisfied with the administration’s move.

Trump has taken many steps to undermine the Affordable Care Act. Health and Human Services’ record is mixed. Officials like Verma have denounced the law but have said that they are obliged to carry it out while it remains on the books.