Oregon Attorney General Joins Lawsuit Challenging Trump Administration’s 2027 ACA Rule

Oregon — Oregon Attorney General Dan Rayfield has joined a multistate lawsuit challenging portions of a Trump administration rule governing Affordable Care Act health plans in 2027.

The complaint filed July 31 in the U.S. District Court for the Northern District of California alleges that federal agencies exceeded their authority and failed to adequately justify changes affecting enrollment and consumer costs.

The lawsuit was filed by 21 state attorneys general and Pennsylvania Gov. Josh Shapiro. The case is State of California et al. v. Robert F. Kennedy Jr. et al., No. 4:26-cv-07991.

“Time and time again, this administration has shown it’s willing to strip away the things people count on, whether it’s health coverage, food assistance or basic protections, all to benefit a select few at the expense of working families,” Rayfield said in the Oregon Department of Justice announcement.

The Department of Health and Human Services and Centers for Medicare & Medicaid Services say the 2027 rule is designed to prevent improper enrollments and subsidy payments, lower premiums and give states greater control over their insurance markets.

The coalition argues that the rule instead creates additional barriers for people seeking coverage.

Among its provisions, the rule requires increased verification of applications submitted during special enrollment periods. It also adds income-verification requirements when an applicant’s reported income does not match federal records or when tax information is unavailable.

The states contend these requirements could delay or prevent coverage, particularly for lower-income workers, self-employed people and applicants with changing incomes. The coalition raised similar objections in a March 2026 comment letter.

The rule also expands eligibility for catastrophic health plans. These plans generally have lower premiums but require consumers to pay substantial costs before most coverage begins. Federal premium tax credits cannot be used to purchase them.

No catastrophic plans are currently offered through Oregon’s marketplace, according to the Oregon DOJ.

Another disputed provision allows certain bronze plans to set annual out-of-pocket limits at 130% of the standard Affordable Care Act limit. Based on the 2027 limits, consumers could face maximum costs of $15,600 for individual coverage or $31,200 for family and other coverage.

CMS says the provision could help insurers continue offering lower-premium bronze plans. The states argue it conflicts with federal cost-sharing protections and could leave patients responsible for larger medical bills.

HHS estimates that the combined changes could reduce marketplace enrollment by up to 2 million people in 2027 compared with its projected baseline. The agency estimates cumulative enrollment through 2030 could be about 5 million lower than without the rule.

The lawsuit alleges that the agencies violated the Administrative Procedure Act by failing to adequately explain the changes, consider their effects or respond meaningfully to public comments. The plaintiffs are asking the court to overturn the challenged provisions and prohibit their enforcement.

The federal defendants had not responded to the complaint when it was filed.