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New Jersey and New York sue to block Trump admin. changes to health insurance marketplaces
By
Michael Sol Warren
Published Aug 2, 2026
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Courtesy of attorneys general of New Jersey and New York
By
Michael Sol Warren
Published Aug 2, 2026
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The attorneys general of New Jersey and New York are suing to block the Trump administration from implementing a new rule that they say will undermine the Affordable Care Act and make it harder for Americans to obtain or keep health insurance.
The rule was issued by the federal Centers for Medicare & Medicaid Services in May, and changes ACA exchanges and insurance plans in plan year 2027
The lawsuit backed by nearly two dozen Democratic-led states was filed on Friday in federal court for the Northern District of California.
Among the changes made by the rule is an expansion of who is eligible for so-called “catastrophic” plans, which have low premiums but only offer limited coverage and have high out-of-pocket costs. And the rule increases limits on out-of-pocket spending under such plans.
“The Trump Administration’s policies have already caused over a million Americans to lose coverage. If these additional changes aren’t stopped, the situation will only get worse,” New Jersey Attorney General Jennifer Davenport said in a statement. “New Jersey families are already reeling this year from the president’s refusal to extend ACA tax credits, his tariffs, and his war. Now, instead of lowering health insurance costs, the Trump Administration is reducing coverage and raising costs.”
New York Attorney General Letitia James said that the catastrophic plans were intended as a last resort for people facing serious financial hardship. She warned that if more people switch to the catastrophic plans, it will drive up premiums for people who remain on standard plans.
“This administration is trying to sabotage the Affordable Care Act through bureaucratic tricks instead of admitting it wants to take health insurance away from millions of Americans,” New James said in a statement.
The rule also creates new income-verification requirements for enrollees. And it makes states defray the costs of benefits that they may require beyond the “Essential Health Benefits” required by the Affordable Care Act, beginning in plan year 2028.
Neither the Department of Health and Human Services or the Centers for Medicare & Medicaid Services immediately responded to requests for comment.
Dr. Mehmet Oz, the administrator of the Medicare and Medicaid centers and a former talk-show host, previously said the rule cracks down on fraud, gives consumers more coverage options and gives insurers more flexibility.
“American taxpayers deserve to know their dollars are going only to people who truly qualify,” Oz said in a statement in May when the rule was finalized.
The new lawsuit comes as states deal with a variety of changes to federal healthcare policies. Nearly 70,000 New Jersey residents dropped their health insurance coverage earlier this year, according to Davenport’s office, after the Trump administration and Congressional Republicans failed to extend tax credits for premiums on health insurance plans purchased through ACA marketplaces. As of mid-March, roughly 38,000 New Yorkers had dropped health insurance they previously had through that state’s marketplace, according to the state.
Tagged
affordable care act
health care
new jersey
new york
Michael Sol Warren
Michael Sol Warren covers New Jersey for WNYC and Gothamist, and previously reported on issues around the Garden State for NJ Spotlight News and NJ Advance Media. He can be reached at [email protected].
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