Twenty-one attorneys general and the Pennsylvania governor filed a lawsuit Friday in federal court to challenge a federal rule that undermines the Affordable Care Act, or ACA, and will make health insurance more expensive and harder to obtain for millions of Americans.
The lawsuit seeks to block a federal rule, proposed by the U.S. Department of Health and Human Services, or HHS, and Centers for Medicare & Medicaid Services, that sets standards for health plans offered in 2027.
In addition to making health insurance more expensive and difficult to obtain, the rule would allow more people to sign up for catastrophic health insurance plans that: aren’t eligible for tax credits, offer only limited coverage, and can leave consumers facing much higher out-of-pocket costs than standard ACA plans.
The rule also allows catastrophic and bronze plans to go over ACA limits on annual out-of-pocket costs, increasing the amount that consumers would need to pay for care.
The coalition argues these and other provisions unlawfully undermine the ACA’s goal of expanding access to affordable healthcare because it increases costs, reduces enrollment, and shifts financial burdens onto consumers, states, and healthcare providers.
“Washingtonians deserve high-quality, affordable health insurance,” Washington State Attorney General Nick Brown said in a statement. “The Trump administration’s own analysis shows this rule will cause millions to lose their health insurance.”
HHS estimates the new rule will cause two million people to lose coverage in 2027 and a total of five million by 2030.
Brown said many more consumers will be pushed into low-quality plans that come with huge out-of-pocket costs.
Congress enacted the ACA to expand access to affordable health insurance. Currently, the ACA Marketplace enrollment has reached a record-high for a fourth year in a row, totaling 24.3 million people in 2025.
The coalition previously challenged the Trump administration’s similar 2025 ACA Marketplace rule. Earlier this week, the U.S. District Court for the District of Massachusetts held a hearing with a final decision expected at a later date.
In a related legal action, last month, a federal court vacated several provisions of the 2025 rule by the administration after finding that they violated the Administrative Procedure Act.
The administration’s new rule setting standards for 2027 health plans brings back many of the same provisions and adds new changes that further undermine the ACA, Brown said.
