New York Attorney General Letitia James, along with attorneys general from 20 other states, has filed a lawsuit against a new federal regulation. The rule in question, set by the U.S. Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services (CMS), is said to threaten health care coverage for millions of Americans. It could also increase health care costs and remove gender-affirming care from the Affordable Care Act’s (ACA) essential benefits.
Attorney General James criticized the rule as “an illegal and dangerous attack on health care access,” stating that it targets low-income and transgender individuals. She emphasized New York’s achievements in expanding coverage and improving affordability, urging the federal government to learn from these successes rather than reverse them.
The ACA was enacted in 2010 to enhance access to affordable health insurance. It required all plans to cover essential health benefits while allowing states to mandate additional benefits. Recent data shows that over 24 million Americans have enrolled under ACA, benefiting from subsidies.
The contested rule introduces changes that could strip up to two million people of their coverage by shortening enrollment periods, eliminating year-round enrollment for low-income individuals, adding paperwork requirements, and limiting automatic reenrollment. It also imposes charges on consumers eligible for zero-dollar premium plans.
Additionally, the rule bans states from including gender-affirming care as essential benefits under ACA when related to gender dysphoria, despite covering similar treatments for other conditions. This aspect of the rule is argued to be discriminatory against transgender youth.
The new regulation requires all state-run exchanges to comply with its provisions, affecting New York’s successful marketplace where over 220,000 people are insured. If implemented, an estimated 12,000 New Yorkers might lose their insurance, with premiums expected to rise statewide.
Attorney General James argues that the rule violates both the Administrative Procedure Act and ACA itself. The coalition seeks court intervention to block parts of the rule or vacate it entirely due to potential financial and public health impacts.
Attorneys general from Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maryland, Massachusetts, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island Vermont Washington Wisconsin joined this legal challenge alongside Pennsylvania’s governor.
