Maine Attorney General Aaron Frey has once again joined a coalition of states, this time in suing the federal Department of Health and Human Services (DHHS) and Centers for Medicare & Medicaid Services (CMS) over new rules for the Affordable Care Act (ACA).
The plaintiff states argue in the lawsuit that the changes advanced by DHHS and CMS could cause up to 1.8 million people to lose their health insurance coverage beginning in 2026.
“This rule creates unnecessary barriers for the nearly 65,000 Mainers who get their health insurance from the exchange to stay covered,” said Attorney General Frey in a statement this past Thursday explaining his decision to join this lawsuit.
“Not only is the rule not about efficiency or reducing waste, but it is intentionally designed to create more red tape and make enrollment harder,” he continued. “We know that when people do not have health insurance, they wait until their health issues become worse, more expensive and less treatable.”
“Once again,” he added, “this is a cruel attack on the structures that keep citizens well and my fellow attorneys general and I are fighting to stop this rule from taking effect.”
Click Here to Read Attorney General Frey’s Full Statement
According to the lawsuit, there are two primary categories of rules to which the states involved are objecting: ACA marketplace operations and covered services.
The July 17 filing in a Massachusetts district court suggests that the federal agencies’ rules “mak[e] sweeping changes that reach far beyond and bear little relation to the primary harm [DHHS] asserted as its justification: fraudulent enrollment by insurance brokers and agents.”
“The Final Rule truncates and eliminates enrollment periods, makes enrollment more difficult, adds eligibility verification requirements, and erects unreasonable barriers to coverage,” the states argued. “And it unlawfully allows for denial of coverage in violation of the ACA’s ‘guaranteed issue’ requirement, and changes how premiums are calculated in spite of a statutorily required method set by the ACA.”
The plaintiff states also draw attention to a policy change that prohibits coverage of any “sex-trait modification procedure” as an essential health benefit, suggesting that the “sole basis” for eliminating this coverage is that “such care is not typically covered by employer plans.”
“These categories of changes will cause tremendous harm if they take effect,” they said. “Plaintiff States that operate their own ACA exchanges will incur unrecoverable compliance costs.”
“Worse still, the Final Rule will undermine Plaintiff States’ health insurance markets and harm the public health, including increasing the risk of disease outbreaks,” they suggested.
On the basis that the agencies’ rules are “contrary to law, arbitrary and capricious, and
profoundly harmful to Plaintiff States,” the coalition is hoping to have the court preliminarily enjoin and ultimately vacate the newly adopted rules.
The policies in question were first proposed on March 19 and offered a twenty-three day public comment period, a time span that the plaintiffs in this case have alleged was legally insufficient.
The Executive Summary for the rule in question connects the amendments to a day-one Executive Order signed by President Donald Trump (R) titled Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis.
Under this Executive Order, all federal agencies were directed to take steps toward “deliver[ing] emergency price relief” and “increas[ing] the prosperity of the American worker.”
“To provide emergency relief from rising improper enrollments and health care costs,” DHHS and CMS explained, “we are finalizing several regulatory actions aimed at strengthening the integrity of the Patient Protection and Affordable Care Act (ACA) eligibility and enrollment systems to reduce waste, fraud, and abuse.”
During the public comment period for this rule, many of the plaintiff states, including Maine, submitted a joint letter raising similar objections as are brought forward in this lawsuit.
In this lawsuit filed this past Thursday, the plaintiff states identify a number of specific policies put forward by the federal agencies that they feel are unlawful, including:
(1) requiring a minimum $5 premium payment for auto-reenrollment,
(2) shorting the length of open enrollment periods from eleven down to nine weeks,
(3) mandating pre-enrollment verification for at least 75 percent of those who sign up during special enrollment periods,
(4) ending acceptance of self-attested projected household income for low-income enrollees,
(5) reducing the failure to file and reconcile (FTR) grace period from two years to one,
(6) allowing coverage to be denied to those with past-due premiums,
(7) amending the premium adjustment methodology, and
(8) expanding the range of actuarial values (AV), or “the percentage of an average consumer’s expected health care expenses will be paid by the plan,” for each coverage tier.
The plaintiff states also take issue with the federal government’s decision to end coverage of “sex-trait modification procedures” as an essential health benefit, something that they characterize in their lawsuit as “medically necessary treatment of gender dysphoria.”
“The Final Rule fails to explain why it is holding gender-affirming care to a different and higher standard than it held infertility treatments, though both are medically necessary, leading to the logical conclusion that the exclusion of gender-affirming care from [essential health benefits] is arbitrary and capricious,” the plaintiff states argue, referring to a 2011 survey that found only 27 percent of employer plans offer coverage for infertility treatment. 24 states currently require coverage of “sex-trait modification procedures” by employer plans.
“Gender dysphoria is a serious medical condition,” the plaintiff states argued. “Treatment for gender dysphoria is medically necessary and aims to resolve the distress associated with the incongruence between a transgender person’s assigned sex at birth and their gender identity.”
“Medically necessary treatment for gender dysphoria is essential healthcare, and prohibitions on this medical care are a ‘dangerous intrusion into the practice of medicine’ and violate the ‘sanctity of the patient-physician relationship,'” the states said.
Because the plaintiff states feel that the changes wrought to the ACA by DHHS and CMS in their new rule would be “catastrophic,” they hope to see the court block the federal government from enforcing these changes and ultimately void the rule altogether.
The plaintiff states are looking to have the court issue a ruling in their case ahead of the rule’s anticipated August 25th effective date.
Click Here to Read the Full Complaint
Aside from Maine, other states joining the lawsuit include California, Massachusetts, New Jersey, Arizona, Colorado, Connecticut, Delaware, Illinois, Maryland, Michigan, Minnesota, Nevada, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington and Wisconsin.
