Attorney General Bonta Co-Leads Lawsuit Challenging Trump Administration Rule That Would Make It Harder for Americans to Obtain Health Coverage Under the ACA

By the Trump Administration's own estimates, the rule will cause up to 1.8 million people to lose their health insurance

OAKLAND — California Attorney General Rob Bonta today co-led with the attorneys general of Massachusetts and New Jersey, a multistate coalition in filing a lawsuit challenging an unlawful final rule promulgated by the U.S. Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) that would create significant barriers to obtaining healthcare under the Affordable Care Act (ACA). The Trump Administration’s final rule would make numerous amendments to rules governing federal and state health insurance marketplaces which the administration estimates will cause up to 1.8 million people to lose their health insurance, while causing millions more to pay increased insurance premiums and out-of-pocket costs like copays and deductibles. The final rule also excludes coverage of gender-affirming care as an essential health benefit (EHB) under the ACA. In the lawsuit, the attorneys general argue that the HHS and CMS rule is arbitrary and capricious, contrary to law, and violates the Administrative Procedure Act (APA). The coalition is also seeking preliminary relief, and a stay, to prevent the challenged portions of the final rule from taking effect in the Plaintiff States before the August 25 effective date.

“Far from delivering on their promises to drive down costs and ‘make America healthier’ the Trump Administration’s HHS and CMS are doing their best to make it harder and more expensive for Americans to obtain health insurance and access care,” said Attorney General Bonta. “These sweeping changes would impose onerous verification requirements, junk health insurance premiums for some consumers, shorten enrollment periods in federal and state healthcare exchanges like Covered California, deprive up to 1.8 million Americans of health insurance, drive up out-of-pocket healthcare costs and so much more. It’s unlawful and it’s wrong – we’re meeting the Trump Administration in court to defend Americans’ healthcare coverage.”

Congress enacted the ACA in 2010 to increase the number of Americans with health insurance and decrease the cost of healthcare. Fifteen years later, the Act continues to meet its goals, with annual enrollment on the ACA marketplace doubling over the past five years, resulting in over 24 million people signing up for health insurance coverage in plan year 2025 on the ACA exchanges and receiving subsidies to make such coverage affordable, including millions of people in the Plaintiff States. Now, with less than four months until open enrollment for plan year 2026 begins, the Trump Administration’s final rule would abruptly reverse that trend, erecting a series of new barriers to enrollment that will deprive up to 1.8 million people of insurance coverage by the Administration’s own estimates, and significantly drive up the costs incurred by Plaintiff States in providing healthcare, including increasing state expenditures on Medicaid, uncompensated emergency care, and funding other services provided to newly uninsured residents.

California has approximately two million ACA plan enrollees, the third highest of any state. The final rule by HHS would make substantial changes to the operation of the ACA marketplaces, including adding new bureaucratic barriers, imposing an automatic monthly charge on all automatically reenrolled consumers who qualify for $0 premiums, shortening the open enrollment period for signing up for health coverage, and making other changes which will make coverage less affordable for millions of individuals nationwide. The final rule would also exclude gender-affirming care as an EHB on federal exchange plans, leaving states responsible for paying for the portion of insurance premiums attributable to any such coverage (but the availability of such care in California would not be impacted).  

In the lawsuit, the attorneys general argue that the HHS and CMS rule is unlawful, arbitrary and capricious, and would cause significant harm to states and their residents. All of the challenged marketplace changes implemented by the final rule will be harmful to individual consumers and state and local governments. The final rule imposes burdensome and costly paperwork requirements, limits the opportunities to sign up for health coverage, substantially increases cost-sharing limits, and forces exchanges and consumers to spend hundreds of millions of dollars to prove eligibility for coverage and subsidies. These changes will result in direct and immediate costs to States as well as harms tied to decreased enrollment.

In filing the lawsuit, California Attorney General Bonta, Massachusetts Attorney General Campbell, and New Jersey Attorney General Platkin are joined by the attorneys general of Arizona, Colorado, Connecticut, Delaware, Illinois, Maryland, Maine, Michigan, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin, as well as Pennsylvania Governor Josh Shapiro. 

A copy of the complaint is available here.