Group of cities sues Trump administration over new changes to Obamacare enrollment and eligibility
The rule, finalized on June 25, shortens the open enrollment period for Americans buying insurance on the marketplace and ends a monthly special enrollment period for people with incomes below 150% of the federal poverty line. It also introduces more preenrollment requirements, such as income verification checks.
The Centers for Medicare and Medicaid Services estimated last month between 725,000 and 1.8 million people could lose coverage due to the rule, but said the changes introduce new 'safeguards' against improper enrollment and overspending.
The lawsuit, filed in federal court in Maryland, was brought by the cities of Chicago, Baltimore and Columbus, Ohio, as well as an association of doctors and a non-profit network of small businesses that rely on the Affordable Care Act marketplace.
They allege that several parts of the new rule violate the ACA and other federal laws, and say the administration ran afoul of federal rulemaking procedures when it created the new policies, including by failing to respond to public comments submitted as the rule was being finalized.
'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 and will ultimately result in higher premiums in the long term and higher out-of-pocket costs for the remaining enrollees,' attorneys for the plaintiffs wrote in the lawsuit.
The plaintiffs, represented by attorneys with Democracy Forward, are asking the court to wipe away the parts of the new rule they're challenging.
Spokespeople for CMS and its parent agency, the Department of Health and Human Services, did not immediately respond to a request for comment on the lawsuit.
Advocates for the Trump administration's rule changes say the ACA marketplace is rife with fraud because of expanded subsidies, or tax credits that keep Americans' monthly premiums low. Millions of people are enrolling in those low-cost plans even if their income makes them ineligible for heavily subsidized plans, according to conservative think tank Paragon Health Institute.
Congress expanded those subsidies in 2021 during the Covid-19 pandemic, but the temporary tax credits are set to expire at the end of 2025. The beefed-up subsidies helped drive a record 24 million people to sign up for coverage for 2025.
The new rule is set to take effect in late August. The House version of President Donald Trump's agenda bill would codify the rule into law, though the Senate legislation has different provisions, which would also tighten eligibility for subsidies and increase verification requirements.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
10 minutes ago
- Yahoo
Trump tariffs live updates: Trump strikes deal with Japan, but EU digs in with over $100B counterattack
The European Union said on Wednesday it plans to hit the US with 30% tariffs on over $100 billion worth of goods in the event the two sides cannot reach a trade deal by Aug. 1. Bloomberg News reported the European Commission will combine $24 billion in approved tariffs with a proposed $83 billion US goods list into one countermeasure package that would hit everything from American whiskey to cars to Boeing (BA) planes. As the EU digs in, President Trump announced two more deals and finalized a third, most notably a pact with Japan. 'I just signed the largest deal in history with Japan," Trump said during the meeting. The president said the agreement includes a 15% tariff on imported goods from Japan, and the country will invest $550 billion into the US. Earlier on Tuesday, Trump said the US had also struck a trade deal with the Philippines, which will see the country's imports face a 19% tariff into the US. Trump said US exports will face no import tax in the Philippines as part of the deal. The White House also unveiled new details of a confirmed trade agreement with Indonesia too. Yahoo Finance's Ben Werschkul reported that a 19% tariff will apply to Indonesian goods, as well as a 40% rate on any 'transhipped' goods. US officials said no tax would apply to "99%" of US imports. The deal developments come as prospects for larger pacts with India, the EU, and Canada look increasingly in doubt. Trump has threatened 25% to 35% tariffs on those larger trade partners. Trump has also said he would soon send letters to over 150 smaller US trade partners, setting blanket tariff rates for that large group. Trump has already sent letters to over 20 trade partners outlining tariffs on goods imported from their countries. Treasury Secretary Scott Bessent on Tuesday said he expected many deals to take shape over the next several days. Read more: What Trump's tariffs mean for the economy and your wallet Here are the latest updates as the policy reverberates around the world. EU readies €100B no-deal plan to match US 30% tariff The European Union announced on Wednesday it plans to hit the US with 30% tariffs on over $100 billion worth of goods in the event that no deal is made and if President Trump decides to follow through with his threat to impose that rate on most of the bloc's exports after Aug. 1. A European Commission spokesman said that the first part of countermeasures would combine an already approved list of tariffs on $24 billion of US goods and a previously proposed list on an additional on $83 billion of American products into one package. The US exports, which would include goods such as Boeing (BA) aircraft, US-made cars and bourbon whiskey would all face heavy tariffs that match Trump's 30% threat. The tariffs would be prepared to come into force next month but only if there is no deal and the US implements its levies after the August deadline, said the people who spoke on condition of anonymity to discuss private deliberations. Bloomberg News reports: Read more here. The European Union announced on Wednesday it plans to hit the US with 30% tariffs on over $100 billion worth of goods in the event that no deal is made and if President Trump decides to follow through with his threat to impose that rate on most of the bloc's exports after Aug. 1. A European Commission spokesman said that the first part of countermeasures would combine an already approved list of tariffs on $24 billion of US goods and a previously proposed list on an additional on $83 billion of American products into one package. The US exports, which would include goods such as Boeing (BA) aircraft, US-made cars and bourbon whiskey would all face heavy tariffs that match Trump's 30% threat. The tariffs would be prepared to come into force next month but only if there is no deal and the US implements its levies after the August deadline, said the people who spoke on condition of anonymity to discuss private deliberations. Bloomberg News reports: Read more here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
10 minutes ago
- Bloomberg
Bessent Says ‘No Rush' to Choose Successor to Fed Chair Powell
Treasury Secretary Scott Bessent said that there's 'no rush' to identify a successor to Federal Reserve Chair Jerome Powell, and that a nominee could potentially come from current board members or the heads of the district banks. 'There are a lot of strong candidates, including several who are on the main board and perhaps regional bank presidents,' Bessent said on Bloomberg Television's Surveillance program Wednesday. He didn't identify any specific names.
CNN
11 minutes ago
- CNN
How Trump turned the tide in his trade war
President Donald Trump has pulled off an impressive feat: He is raising tariffs on some of America's most important trading partners, and the world is largely cheering the agreements as victories. Placing historically high taxes on imports from around the world — particularly at a time when American consumers are still reeling from the highest inflation they've experienced in four decades — marked one of Trump's boldest gambles of his presidency. Trump was largely elected on his pledge to fix Americans' finances. Economists have widely shunned his trade policy, which is expected to raise costs for businesses and consumers. But Trump zagged when everyone was zigging, and — so far — the bet has paid off. He achieved that with some old-fashioned psychology: setting the bar so high for potential tariff pain that anything that has come below that bar appears like a win. Trump 'always has a plan, but it's not always obvious,' Treasury Secretary Scott Bessent told Bloomberg Television Wednesday morning. For example, Trump had threatened Japan with a 25% tariff earlier this month when negotiations stalled. But late Tuesday, a trade agreement between the two nations was announced, including a tariff rate of 15% on Japanese goods imported into the United States. US markets got a healthy bounce higher Wednesday. Japan's markets took off like a rocket. But 15% is more than the 10% that US importers have been paying for Japanese exports since April, when Trump first rolled out his so-called reciprocal tariffs on trading partners — and much more than what the Japanese were paying before Trump took office. The victory, some analysts say, is the certainty that the trade agreements provide investors, consumers and businesses. 'The positive is that hopefully we're coming to the end of all the tariff cloudiness in terms of what the ultimate rates will be so businesses can plan around them,' said Peter Boockvar, chief investment officer of One Point BFG Wealth Partners, in a note to investors Wednesday morning. Boockvar, however, acknowledged this is 'a bizarre political and economic theory world we now live in.' The trade war is far from complete, and the long-term implications of Trump's decisions could yet be damaging — economically and politically. But, in the near term, Trump appears to be winning. That tide began to turn on April 9, when Trump paused for 90 days his 'Liberation Day' tariffs announced a week earlier that had sent the stock market plunging and briefly entering bear market territory. The bond market had also begun to show signs that it might break — until Treasury Secretary Scott Bessent guided Trump away from his harshest tariff levels. Markets have rallied from that point on, and consumer sentiment — which sank near all-time lows — has rebounded. Several other events helped soothe fears since the tariff pause: On April 12, the Trump administration excluded smartphones and electronics from the historically high tariffs it had placed on China, leading to another market bounce-back. In mid-May, the Trump administration reached an agreement with China to lower tariffs dramatically and open some markets that both sides had closed off as tensions rose. Tariffs on Chinese imports fell to 35% from 145%, which had been a historic level that served as an effective shipping embargo. A trade agreement with the UK, a reinforced China agreement and a slew of announcements Tuesday on trade, from Indonesia to the Philippines and then Japan also provided much-needed doses of certainty. Trump has also used tariffs, deals and threats as a way to give US industry a boost. He has fought hard against so-called non-tariff barriers, including digital services taxes, which the administration believes put undue pressure on the American tech industry. For example, late last month, Trump railed against Canada for imposing a tax on online companies and threatened to end trade talks. Trump also said he would set a new tariff for Canada by the end of this week. Days later, Canada backed down and dropped the tax. Trump worked to include opening US exports to foreign countries as part of his trade agreements, too, including beef to the United Kingdom, rice and cars to Japan, and various items to Vietnam, Indonesia and the Philippines. However, it's not clear Trump can claim victory on trade just yet. At least dozens of trading partners are expected to get higher tariffs set at the end of next week, and Trump has floated raising the 10% universal tariff he imposed on April 2 to 15% or 20%. The European Union, another major US trading partner, has found a trade agreement elusive, and tariffs could surge on both sides of the Atlantic as a result. The US and global economies have largely been able to withstand Trump's tariffs over the past several months, but it's not clear that they can if those rates go higher — particularly as US importers work through warehoused inventories of goods that were brought in to the United States before tariffs were put in place. 'It remains too early to fully understand the longer-term implications, especially with another round of new tariff developments expected in August,' said Lynn Song, ING's chief economist for Greater China, said in a note to clients Wednesday morning. Inflation is starting to creep higher. Business sentiment is improving, but earnings and growth expectations remain pretty stagnant. Consumer sentiment is on the upswing but still comparatively low to where it was before Trump started putting tariffs in place. The job market is showing some cracks. As a result, the US dollar continues to sink sharply, in a sign of concern about potential US economic weakness to come. US and Japanese bonds sold off Wednesday, too. That's the market's way of waying the certainty of the present could quickly turn into more tumult in the future.
