Democratic Attorneys General File Lawsuit to Prevent Changes in ACA Health Insurance Marketplaces
A coalition of Democratic attorneys general has filed a lawsuit aimed at blocking parts of a Department of Health and Human Services (HHS) rule set to take effect next month. This rule is alleged to potentially result in nearly 2 million individuals losing their health insurance. The lawsuit was initiated by attorneys general from 20 states, including New Jersey, California, and Massachusetts, alongside Pennsylvania Governor Josh Shapiro. They argue that the changes made by HHS violate the regulations governing state and federal health insurance marketplaces established under the Affordable Care Act (ACA), which could lead to increased healthcare costs for states.
The newly finalized rule is claimed to create significant barriers to enrollment in health insurance marketplaces and increase insurance premiums, co-pays, and out-of-pocket expenses. According to the lawsuit, the Trump administration’s actions could leave up to 1.8 million individuals without health coverage. The attorneys general are seeking a court’s intervention to prevent specific parts of the rule from being enacted. New Jersey Attorney General Matthew Platkin expressed concerns that the rule would introduce confusion into the healthcare market and raise costs for states as the 2026 open enrollment period approaches.
In response to the lawsuit, a representative from HHS has not provided immediate comments. The rule, finalized in June by HHS’s Centers for Medicare & Medicaid Services (CMS), includes measures intended to reduce improper enrollments and the inappropriate distribution of federal funds. The legal action specifically targets provisions of the rule that shorten enrollment periods and impose a $5 monthly fee on certain marketplace shoppers. Additionally, it challenges a provision that excludes transgender healthcare from the list of essential health benefits required by the ACA.
The lawsuit claims that the rule introduces burdensome documentation requirements that will significantly increase costs for consumers trying to prove their eligibility for coverage and subsidies, arguing that the changes are arbitrary and made in violation of federal administrative law.