Attorney General Neronha, coalition sue Trump Administration to block rule that would undermine Affordable Care Act protections

Attorney General Neronha, coalition sue Trump Administration to block rule that would undermine Affordable Care Act protections

Published on Friday, July 31, 2026

Attorney General Peter F. Neronha today joined a coalition of 18 attorneys general and one governor in filing a lawsuit in the U.S. District Court for the Northern District of California to challenge a federal rule that once again illegally undermines the Affordable Care Act (ACA) and would make health insurance more expensive and harder to obtain for millions of Americans.

The lawsuit seeks to block provisions of the U.S. Department of Health and Human Services' (HHS) and Centers for Medicare & Medicaid Services' (CMS) 2027 Notice of Benefit and Payment Parameters, a federal rule that sets standards for health plans offered in 2027. The coalition argues these and other provisions unlawfully undermine the ACA's goal of expanding access to affordable healthcare by increasing costs, reducing enrollment, and shifting financial burdens onto consumers, states, and healthcare providers.

"Once again, this Administration is intent on making life harder for everyday Americans," said Attorney General Neronha. "By forcing these changes, this Administration is increasing the cost of health care for patients, providers, and states, while leaving millions uninsured. At a time where Americans are struggling to meet the cost of living, making health care more expensive is irresponsible and inexcusable. We won on this issue before, and I am confident we will once again succeed in protecting access to health care for Rhode Islanders."

Congress enacted the ACA to expand access to affordable health insurance, and more than 23 million Americans currently receive coverage through its marketplaces. Now, the Administration's new rule would raise barriers to enrollment and drive up the costs of care. Among other harmful changes, the rule expands eligibility for catastrophic health insurance plans that are ineligible for premium tax credits, offer only limited coverage, and can leave consumers facing significantly higher out-of-pocket costs than standard ACA plans. The rule also allows catastrophic and bronze plans to exceed ACA limits on maximum annual out-of-pocket costs, increasing the financial burden on consumers, and attempts to reinstate several provisions that a federal court recently found to be unlawful. HHS estimates the new rule will cause two million people to lose coverage in 2027 alone and a total of five million by 2030.

Today's lawsuit follows the coalition's challenge to the Trump Administration's similar 2025 ACA Marketplace rule. In related litigation, a federal court last month vacated several provisions of the Administration's 2025 rule - including provisions at issue in this case - 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.

In today's lawsuit, the coalition argues that the new rule:

• Reimposes provisions that a federal court has already vacated - including additional income verification requirements and penalties for consumers who do not complete tax-credit paperwork - without addressing the court's legal concerns.
• Unlawfully expands eligibility for catastrophic health plans beyond the limits established by Congress in the ACA.
• Unlawfully allows catastrophic and bronze plans to exceed ACA limits on maximum annual out-of-pocket costs.
• Will increase costs, reduce enrollment, and shift financial burdens onto consumers, healthcare providers, and states.
• Was adopted without adequate explanation or a meaningful response to the coalition's comments, making it arbitrary and capricious under the Administrative Procedure Act.

Joining Attorney General Neronha in filing this lawsuit are the attorneys general of Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, Oregon, Vermont, Virginia, Washington, and Wisconsin, as well as the governor of Pennsylvania.

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