NJ Joins Multistate Lawsuit to Block Trump-Era Rule Threatening Health Coverage Under ACA

MORRISTOWN, NJ — New Jersey Attorney General Matthew J. Platkin has joined a 21-state coalition in filing a lawsuit against a new federal rule that plaintiffs argue will significantly undermine the Affordable Care Act (ACA) and result in widespread loss of health insurance coverage. The lawsuit targets a final rule issued by the U.S. Department of Health and Human Services (HHS), which is set to take effect on August 25.

The rule in question, issued during the Trump administration, introduces a series of changes to the operation of federal and state ACA marketplaces. According to HHS’s own estimates, the modifications could cause between 725,000 and 1.8 million individuals nationwide to lose their health insurance coverage. Plaintiffs contend that millions more would face higher premiums, copays, and deductibles.

“Deliberately making it harder for millions of residents to access affordable health insurance is wrong and unlawful, and we will fight it,” said Attorney General Platkin. “As New Jersey and other states prepare for the 2026 open enrollment period, the Trump Administration is seeking to cause confusion and chaos in the healthcare marketplace, increase costs for our state, and create barriers to enrollment—and the Trump Administration even admits that up to almost two million Americans will lose coverage as a result. We are filing suit to reverse this illegal rule and to stand up for affordable healthcare for New Jerseyans.”

Legal Claims and Relief Sought

In the lawsuit, filed by New Jersey and 20 other states and joined by Pennsylvania Governor Josh Shapiro, the plaintiffs argue that the HHS rule is “arbitrary and capricious,” in violation of the Administrative Procedure Act. The complaint also seeks preliminary relief and a stay of the rule to prevent it from taking effect before the next enrollment cycle begins in the fall.

The coalition asserts that the rule imposes burdensome verification requirements, reduces the open enrollment period, increases cost-sharing limits, and adds fees for consumers who are automatically reenrolled in $0 premium plans. These measures, they argue, will not only limit access to health coverage but will also result in significant fiscal burdens for state governments, including increased spending on Medicaid and uncompensated care.

Local and State Impact

For New Jersey, the proposed changes threaten to disrupt the state-run marketplace, Get Covered New Jersey, which has seen major enrollment growth since it was launched in 2020. The state’s marketplace is operated by the Department of Banking and Insurance and was the first in the nation to offer state-funded subsidies to help reduce premiums for consumers.

During the open enrollment period for plan year 2025, Get Covered New Jersey recorded a historic 513,217 enrollees—a 30% increase over the previous year and a 108% increase since the state assumed control from the federal government. The lawsuit claims that the new rule would undermine these gains by increasing administrative hurdles and reducing affordability for consumers.

Background on the ACA

The Affordable Care Act was enacted in 2010 with the goal of expanding access to health insurance and reducing healthcare costs. Since its implementation, enrollment through the ACA marketplaces has steadily increased. As of plan year 2025, more than 24 million Americans are enrolled in coverage through these exchanges, most with the assistance of federal subsidies.

Plaintiffs in the lawsuit argue that the new rule contradicts the ACA’s intent by adding procedural barriers that will deter eligible residents from enrolling, particularly those in low-income brackets.

Next Steps

With the rule’s effective date set for August 25, the coalition is urging the court to issue a preliminary injunction to prevent its implementation. The lawsuit was filed with contributions from a legal team within the New Jersey Office of the Attorney General, including Deputy Attorneys General and the Solicitor General.

Other participating states include California, Massachusetts, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Michigan, Minnesota, New Mexico, Nevada, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin.

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