Maryland AG Joins Multi-State Lawsuit Against Federal Rule Weakening Affordable Care Act

Maryland Attorney General Anthony G. Brown is part of a coalition of 21 state attorneys general and the Governor of Pennsylvania who have filed a lawsuit challenging a federal rule that is designed to undermine the Affordable Care Act (ACA). The legal action, filed in the U.S. District Court for the Northern District of California, seeks to prevent the implementation 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. This rule, which sets standards for health plans offered in 2027, is argued to increase costs and reduce access to health insurance for millions of Americans.

The lawsuit specifically targets provisions within the new federal rule that allegedly expand eligibility for catastrophic health insurance plans. These plans, according to the coalition, offer limited coverage and can result in consumers facing substantially higher out-of-pocket expenses compared to standard ACA plans. Furthermore, the rule reportedly permits catastrophic and bronze plans to exceed the ACA’s limits on maximum annual out-of-pocket costs, placing a greater financial burden on individuals. The coalition contends that these changes, alongside the reinstatement of several provisions previously deemed unlawful by a federal court, contravene the ACA’s core objective of broadening access to affordable healthcare. The U.S. Department of Health and Human Services itself estimates that the new rule could lead to two million individuals losing their health coverage in 2027, with the total number potentially reaching five million by 2030.

The coalition’s legal challenge asserts that the federal rule unlawfully reintroduces provisions that a federal court had previously vacated, including stricter income verification requirements and penalties for consumers failing to submit tax-credit paperwork, without addressing the court’s legal objections. The suit also argues that the rule improperly broadens eligibility for catastrophic health plans beyond the scope intended by Congress and permits these plans, along with bronze plans, to exceed ACA limits on maximum annual out-of-pocket expenses. The attorneys general and the Governor of Pennsylvania maintain that the rule will drive up costs, decrease enrollment numbers, and shift financial burdens onto consumers, healthcare providers, and states. They also contend that the rule was adopted without sufficient explanation or adequate consideration of public comments, rendering it arbitrary and capricious under the Administrative Procedure Act.

The coalition challenging the rule includes the attorneys general from Arizona, California, Colorado, Connecticut, Delaware, Illinois, Massachusetts, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin. Pennsylvania Governor Josh Shapiro also joined the lawsuit. This legal action follows a previous challenge brought by the coalition against a similar ACA Marketplace rule issued for 2025 by the Trump Administration. In that prior litigation, a federal court last month invalidated several provisions of the 2025 rule, including some that are now being reintroduced in the 2027 rule, finding them to be in violation of the Administrative Procedure Act.

Article by Mel Anara, based upon information from the Maryland Attorney General’s Office.

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