TRENTON, N.J. — New Jersey Attorney General Jennifer Davenport has joined a multistate lawsuit challenging a federal rule the state says would make health insurance more expensive and harder to obtain under the Affordable Care Act.
The lawsuit, co-led by Davenport and California Attorney General Rob Bonta and joined by 19 other attorneys general and Pennsylvania Gov. Josh Shapiro, seeks to block portions of the Trump administration’s rule governing 2027 Affordable Care Act health plans.
According to the lawsuit, the rule would expand eligibility for catastrophic health insurance plans, increase allowable out-of-pocket costs for some plans, reduce enrollment and shift additional financial burdens to consumers, healthcare providers and states.
“The Trump Administration’s policies have already caused over a million Americans to lose coverage. If these additional changes aren’t be stopped, the situation will only get worse,” said Attorney General Jennifer Davenport. “New Jersey families are already reeling this year from the president’s refusal to extend ACA tax credits, his tariffs, and his war. Now, instead of lowering health insurance costs, the Trump Administration is reducing coverage and raising costs.”
State officials said the new rule reinstates provisions previously challenged in court, including additional income verification requirements and penalties for consumers who fail to complete tax credit paperwork. The coalition also argues the administration unlawfully expanded eligibility for catastrophic health plans beyond limits established by Congress and exceeded Affordable Care Act limits on annual out-of-pocket costs for catastrophic and bronze plans.
The lawsuit follows an earlier legal challenge to the Trump administration’s 2025 Affordable Care Act Marketplace rule. A federal court last month vacated several provisions of that rule, including some that are again at issue in the 2027 regulation.
According to the U.S. Department of Health and Human Services, the 2027 rule could result in 2 million people losing health insurance coverage in 2027 and 5 million people by 2030.
The Affordable Care Act, enacted in 2010, expanded access to health insurance through state and federal marketplaces. Between 2020 and 2025, enrollment in ACA marketplace plans doubled to more than 24 million people nationwide. State officials said enrollment declined by 1.2 million in 2026 after changes implemented by the Trump administration.
New Jersey officials also noted that nearly 70,000 residents dropped coverage through Get Covered New Jersey after enhanced federal premium tax credits expired, resulting in higher monthly premiums and fewer residents qualifying for subsidies.
The lawsuit was filed in federal court by New Jersey, California, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, Washington and Wisconsin, along with Pennsylvania Gov. Josh Shapiro.
