RFK Jr. faces 21-state lawsuit over rule gutting Affordable Care Act coverage

(CN) — A multistate coalition sued the Trump administration Thursday challenging a proposal by the Department of Health and Human Services they warn would make it more difficult to receive health care though Affordable Care Act marketplaces and throw 1.8 million people off their health insurance.

The 21 state attorneys general, led by California Attorney General Rob Bonta, filed the suit in the U.S. District Court in Massachusetts, asked a federal judge to block the rule before it takes effect on Aug. 25.

The administration claims that the new rule, “Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability,” will address waste, fraud and abuse in the Patient Protection and ACA eligibility and enrollment systems as well as rising “improper enrollment and health care costs.”

“This isn’t a serious attempt to protect consumers,” Bonta said at a press conference Thursday. “It’s yet another political move to punish vulnerable communities by removing access to vital care and gutting the Affordable Care Act.”

According to the attorneys general, the new rule would truncate and eliminate enrollment periods, make enrollment more difficult, add eligibility verification requirements, erect unreasonable barriers to coverage, allow for the denial of coverage in violation of the ACA’s “guaranteed issue” requirement and change how premiums are calculated.

Further, the rule would prohibit coverage of any “sex-trait modification procedure” as an essential health benefit — a term the coalition highlights in a footnote as a “political creation” by the conservative Manhattan Institute that does not exist in medicine or law — based solely on the fact that employers do not typically cover such care.

“These categories of changes will cause tremendous harm if they take effect,” the attorneys general wrote. “Plaintiff states that operate their own ACA exchanges will incur unrecoverable compliance costs. Plaintiff states will also lose tax revenue derived from insurance premiums, and incur increased expenses providing health care to individuals who the final rule renders uninsured.”

They added that the rule would undermine the states’ health insurance markets, hurt public health by increasing the risk of disease outbreaks and harm newly uninsured residents.

The coalition further ask a judge, who has yet to be assigned, to issue a preliminary injunction and a stay to prevent the challenged portions of the rule from taking effect in their states.

New Jersey Attorney General Matthew Platkin added Thursday that the proposed rule was a unilateral attack on Congress’ intent when it passed the ACA.

“The president does not, and his administration do not, have the right to with the stroke of a pen undermine a legal structure that was put in place by Congress specifically for the purpose of making health care more accessible and more affordable for every American,” Platkin said. “They’re not in any way trying to address what they consider to be waste, fraud and abuse — they’re trying to make health care more expensive and less accessible.”

California and New Jersey are joined in the suit by Massachusetts, Arizona, Colorado, Connecticut, Delaware, Illinois, Maryland, Maine, Michigan, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, Wisconsin and Pennsylvania.

The Department of Health and Human Services did not respond to a request for comment.

Thursday’s lawsuit is nearly identical to a challenge brought in the U.S. District of Maryland on July 1, where the cities of Baltimore, Columbus and Chicago challenged the administration’s proposed rule. The coalition warned that the rule would hurt each state’s ACA marketplace, which represent three common types of marketplaces across the country.

Certain states, like Maryland, created their own marketplaces, also known as exchanges. Others like Illinois created marketplaces on the federal healthcare.gov platform while it transitions to a state-based exchange like Maryland. Meanwhile, states like Ohio have an exchange operated by the Centers for Medicare & Medicaid Services.

In their suit, the states warned the new rule would: create a monthly $5 fee for low-income enrollees until reaffirming their zero-premium plans in 2026; increase annual out-of-pocket limits on cost sharing by 15% and average premiums by 4.5%; increase premiums on an exchange plan up to $714 per year for an average family; allow insurers to refuse to enroll certain individuals with debt; and shorten enrollment periods by two weeks starting in 2027, among other changes.

That case is currently before U.S. District Judge Brendan Hurson, a Joe Biden appointee, who has set a hearing on the cities’ preliminary injunction motion for Aug. 14.

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