Attorney General Tong Joins Lawsuit Challenging Trump Administration Rule That Would Cause up to 1.8 Million People to Lose Health Insurance

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07/17/2025

Attorney General Tong Joins Lawsuit Challenging Trump Administration Rule That Would Cause up to 1.8 Million People to Lose Health Insurance

(Hartford, CT) – Attorney General William Tong today joined a multistate coalition filing a lawsuit challenging an unlawful final rule from 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 coverage 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.

“Inflated premiums, more copays and deductibles, new junk fees and red tape. These rules are designed to jack up healthcare costs for American families and cause upwards of 1.8 million people to lose their health insurance entirely. And why? So that Trump and his cronies can have more money to pay for tax breaks for billionaires. These rules were rushed through with no legal process or planning, in violation of numerous laws. We’re suing, and we’re doing everything we can to protect access to affordable healthcare,” said Attorney General Tong.

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.

The final rule by HHS would make substantial changes and bureaucratic barriers to the operation of the ACA marketplaces, including adding new verification requirements, 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.

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, Attorney General Tong is joined by the attorneys general of Arizona, California, Colorado, Delaware, Illinois, Maryland, Massachusetts, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin, as well as Pennsylvania Governor Josh Shapiro, on behalf of the Commonwealth of Pennsylvania.

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Media Contact:

Elizabeth Benton
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