Attorney General Dan Rayfield and a coalition of 20 other attorneys general and the Governor of Pennsylvania filed a lawsuit challenging a new federal rule that would make health insurance more expensive and harder to get for millions of Americans – the latest in a series of attempts to weaken the Affordable Care Act (ACA).
“Time and time again, this administration has shown it’s willing to strip away the things people count on, whether it’s health coverage, food assistance or basic protections, all to benefit a select few at the expense of working families,” said Attorney General Rayfield. “We’re fighting back against the federal administration’s efforts to make Americans sicker, poorer, and less free.”
The lawsuit targets a rule from the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) that sets the ground rules for health plans sold in 2027. The coalition already raised objections to this rule in a formal comment letter back in March 2026 – objections the agencies largely ignored.
More than 23 million Americans get their health coverage through ACA marketplaces. HHS itself estimates this rule would cause 2 million people to lose coverage in 2027 alone, and 5 million by 2030.
The feds’ rule would:
- Allow “bronze” and catastrophic level plans to exceed the ACA’s caps on how much people pay out of pocket each year, meaning bigger bills for consumers.
- Bring back rules a court already struck down. The rule tries to reinstate paperwork and income-verification requirements that a federal court recently ruled were illegal, without fixing the problems the court identified.
- Increase costs, reduce enrollment, and shift financial burdens onto consumers, healthcare providers, and states.
- Expand “catastrophic” health plans. These bare-bones plans don’t qualify for the tax credits that make ACA coverage affordable, cover very little, and can leave people with huge bills if something goes wrong. (Note: Catastrophic plans aren’t currently available in Oregon)
The attorneys general say this rule was adopted without adequate explanation or a meaningful response to the coalition’s comments, making it arbitrary and capricious under the Administrative Procedure Act.
This isn’t the coalition’s first fight over ACA rules – they’re also challenging a similar 2025 rule in a separate case. Earlier this week, a federal judge in Massachusetts heard arguments in that case, with a ruling expected later.
Today’s lawsuit was filed in the U.S. District Court for the Northern District of California. Alongside Attorney General Rayfield in this filing are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Rhode Island, Vermont, Virginia, Washington, and Wisconsin, as well as Pennsylvania Governor Josh Shapiro.
