Attorney General Nessel Joins Lawsuit Challenging Trump Administration Rule That Would Make It Harder for Americans to Obtain Health Coverage Under the ACA

LANSING – Michigan Attorney General Dana Nessel today joined a multistate coalition in filing a lawsuit (PDF) challenging an unlawful final rule promulgated by 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. 

“Everyone — no matter who they are, where they live, or what they do — deserves access to affordable healthcare,” Nessel said. “This access gives people the ability to care for their children, manage chronic conditions, and live full and healthy lives. The Trump Administration’s move to enact arbitrary and unlawful barriers on the Affordable Care Act threatens the health, safety, and well-being of our communities. I remain committed to working alongside my fellow attorneys general to safeguard the ACA and fight for the rights of residents to receive the coverage they need.” 

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. These unlawful rule changes will affect the 516,000 Michigan citizens enrolled in ACA plans.   

In the lawsuit the attorneys general argue that 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 Nessel is joined by the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maryland, Massachusetts, Maine, 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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