HHS sued by state attorneys general over ACA rule they say creates coverage barriers

A group of state attorneys general has sued HHS over a proposed rule set to go into effect that they claim would lead to up to 1.8 million individuals losing health insurance coverage through Affordable Care Act marketplaces.

The 20 state attorneys general, along with Pennsylvania Gov. Josh Shapiro (Dem.), say that a Trump administration final rule would make changes to state and federal insurance marketplaces that would lead to higher premiums and out-of-pocket costs.

Those changes also include additional verification requirements, an automatic monthly charge on automatically reenrolled consumers who qualify for $0 premiums, and narrowing the open enrollment period.

They add that the rule would transfer more health care costs to states.

The lawsuit, filed in a Massachusetts federal court, argues that the rule is “arbitrary and capricious, contrary to law, and violates the Administrative Procedure Act,” according to a news release from New Jersey Attorney General Matthew Platkin.

The attorneys general are asking the court for preliminary relief, as well as a stay to block provisions of the rule from taking effect before the effective date of August 25.

Elevance Health (NYSE:ELV), UnitedHealth Group (NYSE:UNH), CVS Health’s Aetna (NYSE:CVS), Centene (NYSE:CNC) and Oscar Health (NYSE:OSCR) are among the largest insurers in ACA marketplaces.