New York Attorney General Letitia James, leading a coalition of 21 states, filed a lawsuit against the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) over a new federal regulation. The rule, which critics say will limit health care coverage, is set to take effect in August. "This new rule is an illegal and dangerous attack on health care access," James said in a statement. The policy changes would reportedly cause up to two million individuals to lose their coverage, shorten enrollment periods, and add complicated paperwork, among other restrictions, as per the New York Attorney General's Office.
The Patient Protection and Affordable Care Act (ACA), passed in 2010, aimed to broaden health insurance access and reduce costs. Over 24 million Americans are now enrolled, many benefiting from subsidies that make insurance more affordable. However, the new HHS rule undermines these goals by altering eligibility and enrollment processes, and introducing charges for consumers on zero-dollar premium plans. Attorney General James deems these changes as a direct attack, especially on low-income and transgender people—calling it out for ignoring ACA's core mission.
According to the lawsuit, the rule also unrightfully excludes gender-affirming care from the ACA's essential health benefits. Insurers would be barred from covering such services when related to gender dysphoria, even though they remain available for other treatments. This exclusion stands in opposition to ample research that has demonstrated the benefits of gender-affirming care in significantly reducing depression, anxiety, and suicidal tendencies in transgender youth.
The implications of the rule for state-run health care exchanges are significant. In New York, for example, over 220,000 people rely on the ACA marketplace and since its inception, the uninsured rate has dropped from 11 percent to 4.8 percent, according to official reports. The anticipated changes could see about 12,000 New Yorkers losing their insurance instantly, and create a financial burden on the state's resources, with over $10 million required just to update systems to comply with the new requirements. Some of these mandates, like increased income verification, may not be implementable in time for the start of the new plan year.
The coalition of states contends that the rule violates both the Administrative Procedure Act and the ACA itself. The lawsuit aims to halt key parts of the rule from being enacted and to have them vacated entirely to prevent the detrimental financial and public health consequences. Joining New York in this legal challenge are Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maryland, Massachusetts, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, and Wisconsin, along with the governor of Pennsylvania.
