California AG Sues HHS Over 2027 ACA Coverage Provisions

• California Attorney General Rob Bonta leads a coalition of states in suing HHS and CMS over the 2027 Notice of Benefit and Payment Parameters.
• The new rule will increase out-of-pocket costs for millions of Americans who rely on the ACA to afford health coverage.
• The states claim that the new rule is arbitrary and capricious, violating the Administrative Procedure Act.

The Affordable Care Act was designed to make healthcare more affordable and accessible, but once again, this administration is moving in the wrong direction by adopting harmful provisions that push consumers into barebones plans and strip away critical protections.

A coalition of states, led by California Attorney General Rob Bonta, has filed a federal complaint against the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS). The complaint challenges the 2027 Notice of Benefit and Payment Parameters, which the states claim will drastically increase out-of-pocket costs for millions of Americans who rely on the Affordable Care Act (ACA) to afford health coverage. The new rule revives provisions that were previously vacated by a federal court as arbitrary and illegal, while also imposing new provisions that will harm the ACA by shifting costs to enrollees and states. According to the complaint, the 2026 rule will decrease enrollment by up to 5 million people from 2026-2030, with 2 million of those losses occurring in 2027.

The states' claims under the Administrative Procedure Act (APA) may set a precedent for future challenges to federal regulations. The APA requires that agencies follow specific procedures when issuing new rules, and the states argue that HHS and CMS failed to do so in this case. This is not the first time that states have challenged ACA-related rules; a coalition of cities and health professionals sued HHS over the 2025 rule last year, and 21 states joined them in their lawsuit. The 2026 rule expands eligibility for enrollment in 'barebones catastrophic plans' but will result in a net decrease in enrollment, according to the complaint.

The Affordable Care Act was designed to make healthcare more affordable and accessible, but this new rule could have the opposite effect. The states are seeking a court declaration that the new rule is arbitrary and capricious and a block on its implementation. If successful, this lawsuit could impact client healthcare costs and access to necessary care for millions of Americans. Compliance officers should be aware of the states' claims under the APA, which may set a precedent for future challenges to federal regulations.

Lawyers should watch for potential changes to Affordable Care Act coverage provisions, which could impact client healthcare costs and access to necessary care. Compliance officers should be aware of the states' claims under the Administrative Procedure Act, which may set a precedent for future challenges to federal regulations.

Source: Original reporting via CN