Marissa Plescia , 2025-07-18 22:34:00
Democratic attorneys general of 20 states, as well as the governor of Pennsylvania, filed a lawsuit against the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services on Thursday. It challenges a recent final rule that they argue will create significant barriers in accessing care under the Affordable Care Act.
The lawsuit, filed in the U.S. District Court for the District of Massachusetts, was co-led by California Attorney General Rob Bonta, Massachusetts Attorney General Andrea Joy Campbell and New Jersey Attorney General Matthew Platkin. They were 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, and Pennsylvania Governor Josh Shapiro.
The final rule the lawsuit challenges was introduced in June and is set to go into effect in August. Its changes include tightening eligibility verifications for ACA plans, repealing the special enrollment period for people with incomes below 150% of the federal poverty lines and prohibiting subsidies to ACA plans for gender-affirming care. It is projected to cause up to 1.8 million people to lose their coverage.
In the lawsuit, the states argue that this final rule is “contrary to law” and “arbitrary and capricious.” The rule violates the Administrative Procedure Act in a couple of ways, including making “substantively invalid changes to the ACA marketplace,” according to the complaint.
“The Final Rule truncates and eliminates enrollment periods, makes enrollment more difficult, adds eligibility verification requirements, and erects unreasonable barriers to coverage—making sweeping changes that reach far beyond and bear little relation to the primary harm HHS asserted as its justification: fraudulent enrollment by insurance brokers and agents,” the states argued in the complaint.
They added that the rule makes changes without considering alternatives or downsides, such as the millions of people who will lose coverage.
In addition, they allege that the final rule wrongly bans coverage of any “sex-trait modification procedure” as an essential health benefit.
“The Final Rule’s sole basis for treating these items and services as non-essential health benefits is HHS’s conclusion that such care is not typically covered by employer plans. In excluding this wide, ambiguous range of benefits, HHS departed from its longstanding policy of prioritizing state flexibility in each State’s regulation of healthcare,” the lawsuit stated. “This conclusion is further belied by unrefuted evidence that was put before the agency yet disregarded without explanation.”
The changes included in the final rule will cause “tremendous harm,” the states argued. They said that the plaintiff states that operate their own ACA exchanges will suffer significant compliance costs, and the plaintiff states will also lose tax revenue from insurance premiums. In addition, they’ll face higher costs for providing care to individuals left uninsured by the final rule.
“Worse still, the Final Rule will undermine Plaintiff States’ health insurance markets and harm the public health, including increasing the risk of disease outbreaks. And Plaintiff States’ newly uninsured residents will suffer firsthand the profound harms of lacking access to necessary, affordable healthcare,” they said in the complaint.
The plaintiffs are calling for preliminary relief and a suspension of the rule.
Photo: Valerii Evlakhov, Getty Images