States sue HHS and CMS over ACA rule that could raise costs and cut enrollment
A coalition of 20 states, joined by California Attorney General Rob Bonta and Pennsylvania Governor Josh Shapiro, filed a federal lawsuit challenging the 2027 Notice of Benefit and Payment Parameters, saying it will increase out-of-pocket expenses and lower Affordable Care Act enrollment.
In Oakland, a group of 20 states, together with California Attorney General Rob Bonta and Pennsylvania Governor Josh Shapiro, lodged a complaint in federal court against HHS secretary Robert Kennedy and CMS administrator Mehmet Oz. The suit targets the 2027 Notice of Benefit and Payment Parameters, a federal rule the states say violates the Affordable Care Act by raising out-of-pocket costs and limiting coverage. According to the 32-page filing, the rule reintroduces four provisions—such as heightened income verification and penalties for incomplete tax-credit paperwork—that a court previously struck down as arbitrary and illegal.
It also expands enrollment in bare-bones catastrophic plans beyond ACA limits, which the states predict will cut enrollment by up to five million people between 2026 and 2030, with two million lost in 2027 alone. The complaint alleges breaches of the Administrative Procedure Act and seeks a declaration that the rule is unlawful and an order blocking its enforcement. Officials from HHS and CMS have not responded to comment requests.
Why it matters
The case could reshape health coverage for millions and shift costs from the federal government to state budgets.
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