A group of cities is suing the feds to challenge recently finalized changes to the Affordable Care Act's marketplaces, which they say could lead 3 million people to lose coverage.
The lawsuit is led by Columbus, Ohio; Chicago and Baltimore, alongside Pima County, Arizona. In addition, Doctors for America and the Main Street Alliance are plaintiffs in the suit. In the complaint, they argue that the effects of the final rule are "directly contrary to the landmark legislation" due to the potential coverage losses.
The plaintiffs said that while the rule aims to make care more affordable while managing the administrative overhead, instead "the rule accomplishes the opposite," by creating "numerous" barriers to coverage rather than making it easier to secure a plan.
"The new rule is a continuation of the prior Trump Administration’s years-long effort to undermine the ACA," the cities said.
"Now, the Trump-Vance Administration returns yet again with another 'death by a thousand paper cuts' approach to the ACA," the plaintiffs continued. "Cloaked in the pretense of government efficiency and fraud prevention, the 2026 rule creates numerous barriers to affordable insurance coverage, negating the ACA’s goal of extending affordable health coverage to all Americans, and instead increasing the population of underinsured and uninsured Americans."
The rule, which was finalized in mid-May, and expands access to catastrophic and non-network plans as lower-cost alternatives, which has drawn concern from industry groups that warn these plans may leave members at risk for unexpectedly high costs.
In addition, the rule pulls back previously-established limits on non-standard plan designs and instituted new cost-sharing parameters in bronze tier and catastrophic plans.
Groups like the Association for Community Affiliated Plans (ACAP) have warned that the changes could add further uncertainty to a market that's already facing significant change and enrollment churn.
The plaintiffs argue that in addition to the potential downsides of the changes in the rule, the rollout runs afoul of existing law.
"Many of this rule’s provisions are in direct conflict with federal law," they said. "And many of its provisions are arbitrary, having been promulgated without observance of proper procedure, reasonable explanation, or meaningful response to public comments, and without consideration of the harm the rule will impose on the millions of consumers whose health and well-being depend on access to affordable coverage."
The lawsuit challenges more than a dozen elements of the rule, including the expansion of non-network and catastrophic plans and updates to access to premium tax credits. The plaintiffs are asking the judge to set the rule aside entirely or put a stay in place to prevent the rule from taking effect on July 20.
A similar legal fight over changes to the ACA instituted in 2025 also remains ongoing, with a federal judge placing a stay on the program integrity changes in December.