Rule Also Excludes Gender-Affirming Care as an Essential Health Benefit
Chicago – Attorney General Kwame Raoul today announced he joined a multistate coalition in filing a lawsuit challenging an unlawful final rule the Trump administration introduced, which would govern federal and state health insurance marketplaces and create significant barriers to obtaining health care coverage under the Affordable Care Act (ACA).
The final rule announced by the U.S. Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) also excludes coverage of gender-affirming care as an essential health benefit (EHB) under the Administrative Procedure Act (ACA). In the lawsuit, Raoul and the attorneys general argue the rule is unlawful and would cause significant harm to local governments and residents because it imposes burdensome and costly paperwork requirements, limits the opportunities to sign up for health coverage, increases cost-sharing limits, and forces exchanges and consumers to spend hundreds of millions of dollars to prove eligibility for coverage and subsidies. The coalition is also seeking preliminary relief to prevent the challenged portions of the final rule from taking effect in the plaintiff states before the August 25 effective date.
“Illinois’ most vulnerable residents would be most impacted by the Trump administration’s rule, and they can least afford the resulting obstacles that will make it significantly more difficult to obtain health insurance under the Affordable Care Act,” Raoul said. “In the 15 years since the Affordable Care Act became law, millions of people throughout the country have signed up for health insurance coverage. I am proud to join my fellow state attorneys general to oppose this arbitrary and illegal rule, and we will continue to use all the tools at our disposal to fight the Trump administration’s continued unlawful orders.”
Congress enacted the ACA in 2010 to increase the number of Americans with health insurance and to decrease the cost of health care. Fifteen years later, the act continues to meet its goals, with annual enrollment on the ACA marketplace doubling over the past five years. In 2025, over 24 million people, including millions of people in the plaintiff states, signed up for health insurance coverage on the ACA exchanges and received subsidies to make such coverage affordable.
Raoul and the coalition explain that with less than four months until the start of open enrollment for plan year 2026, the Trump administration’s final rule would abruptly reverse that trend, creating a series of new barriers to enrollment. The administration’s own estimates show the rule will deprive up to 1.8 million people of insurance coverage, and cause millions more to pay increased insurance premiums and out-of-pocket costs like copays and deductibles. The rule will also significantly drive up the health care costs incurred by plaintiff states, resulting in increased state expenditures on Medicaid and other services provided to newly-uninsured residents, as well as uncompensated emergency care.
The final rule will cause an estimated 14,000 Illinoisians to lose health insurance access and will cause Illinois health insurance premiums to rise. The increase in uninsured residents will have a detrimental impact on Illinois and its residents, including reducing the revenue and operations of hospitals, particularly the state’s safety net and critical access hospitals that treat patients in rural communities and underserved areas of cities.
Raoul and the coalition state that HHS’ final rule would create a number of changes and barriers to the ACA marketplaces, including adding new verification requirements, imposing an automatic monthly charge on all automatically-reenrolled consumers who qualify for $0 premiums, shortening the open enrollment period during which people sign up for health coverage, and other changes that will make coverage less affordable for millions of individuals nationwide. The final rule would also exclude gender-affirming care as an essential health benefit (EHB) on federal exchange plans, leaving states responsible for paying for the portion of insurance premiums attributable to any such coverage.
Raoul and the attorneys general argue in the lawsuit that the HHS and CMS rule is unlawful and would cause significant harm to local governments and residents because it imposes burdensome and costly paperwork requirements, limits the opportunities to sign up for health coverage, increases cost-sharing limits, and forces exchanges and consumers to spend hundreds of millions of dollars to prove eligibility for coverage and subsidies.
Joining Raoul in in filing the lawsuit are attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington and Wisconsin. The state of Pennsylvania also joined the lawsuit.
