Cities Sue Trump Administration Over Obamacare Enrollment Changes

A coalition of Democratic-led cities has filed a lawsuit against the Trump administration, challenging recent modifications to the Affordable Care Act (ACA) that they argue will weaken the landmark health care law and potentially strip nearly 2 million Americans of their health insurance. The contested rule, finalized on June 25, shortens the open enrollment period for insurance purchased through the ACA marketplace and eliminates a monthly special enrollment period for individuals earning below 150% of the federal poverty line.

The lawsuit, lodged in a federal court in Maryland, was initiated by the cities of Chicago, Baltimore, and Columbus, Ohio, alongside an association of doctors and a non-profit network of small businesses reliant on the ACA marketplace. The plaintiffs contend that the new rule violates several provisions of the ACA and other federal statutes, accusing the administration of bypassing required federal rulemaking procedures, including neglecting to address public comments during the rule’s finalization.

Impact of the Rule Changes

According to the Centers for Medicare and Medicaid Services (CMS), the rule could result in 725,000 to 1.8 million people losing their insurance coverage. CMS defends the changes, suggesting they introduce essential “safeguards” against improper enrollment and excessive spending. However, the plaintiffs argue that these measures will lead to increased premiums and out-of-pocket expenses for those who remain insured.

“Rather than reducing the cost of insurance for consumers, or increasing their enrollment rates and benefits, Defendants’ new policies will cause at least 1.8 million Americans to lose coverage on the ACA’s health insurance Exchanges in 2026 alone,” the plaintiffs’ attorneys stated in the lawsuit.

The plaintiffs, represented by Democracy Forward, are seeking judicial intervention to overturn the contested aspects of the new rule. Meanwhile, spokespeople for CMS and the Department of Health and Human Services have yet to comment on the ongoing litigation.

Arguments and Counterarguments

Advocates of the Trump administration’s changes argue that the ACA marketplace is plagued by fraud due to expanded subsidies, which are tax credits designed to keep premiums affordable. According to the conservative Paragon Health Institute, many individuals are enrolling in these low-cost plans despite being ineligible for significant subsidies based on their income.

These subsidies were temporarily increased by Congress in 2021 during the COVID-19 pandemic, contributing to a record 24 million people signing up for coverage in 2025. However, these enhanced tax credits are set to expire at the end of 2025, raising concerns about future affordability and accessibility of health insurance.

Legislative and Political Context

The new rule is scheduled to be implemented in late August. A version of President Donald Trump’s agenda bill in the House aims to enshrine the rule into law, although the Senate’s version includes different provisions that would further restrict subsidy eligibility and enhance verification requirements.

This legal challenge is the latest in a series of confrontations between the Trump administration and proponents of the ACA, a cornerstone of former President Barack Obama’s legacy. The ACA has faced numerous legal and political battles since its inception, with opponents often criticizing it for its cost and regulatory complexity.

Looking Ahead

The outcome of this lawsuit could have significant implications for the future of the ACA and the millions of Americans who depend on it for their health coverage. If the court sides with the plaintiffs, it may halt the implementation of the new rule, maintaining broader access to the ACA marketplace. Conversely, a ruling in favor of the Trump administration could solidify the changes, potentially leading to significant shifts in the health insurance landscape.

As the legal proceedings unfold, stakeholders across the political spectrum will be closely monitoring the developments, which could influence future health care policies and the ongoing debate over the ACA’s role in the American health care system.

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