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City of Chicago Wins Challenge to Federal Rule Threatening Affordable Care Act Coverage

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CHICAGO – The City of Chicago today announced a significant victory after the U.S. District Court for the District of Maryland issued a ruling last Friday blocking central provisions of a federal rule the Trump Administration tried to change under the Affordable Care Act (ACA). The court found that the federal government failed to provide sufficient data or a meaningful explanation to justify the proposed changes – concerns the court agreed with in concluding the provision was not "reasonable and reasonably explained."

"Millions of Americans gained access to affordable, comprehensive health care for the first time through the Affordable Care Act.  Yet the prior and current Trump Administrations have spent years attempting to weaken it," said Mayor Brandon Johnson.  "Last year, they once again tried to impose unnecessary hurdles in a rule that would have pushed people out of coverage.  Fortunately, the district court saw this latest unlawful effort for what it is and stepped in to protect the coverage our residents depend on."

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In July 2025, Chicago joined a coalition of cities, public health professionals, and small business advocates – including the City of Columbus, the Mayor and City Council of Baltimore, Doctors for America, and Main Street Alliance – to sue the U.S. Department of Health and Human Services Secretary Robert F. Kennedy for violating the Administrative Procedure Act.  In its lawsuit, the coalition argued that the rule would increase health care costs and create new enrollment burdens that would have restricted an individual's access to ACA coverage.

According to the complaint, the federal rule adopted by the Centers for Medicare and Medicaid Services (CMS), which regulates the ACA, would have increased annual health care costs by at least $714 for a typical family, allowed insurers to deny coverage to potential enrollees over debts as low as $10, and imposed a new $5 "junk fee" on individuals automatically re-enrolled in zero premium plans unless they took extra steps to reconfirm coverage.

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"Federal agencies have to follow the law when making policy changes," said Corporation Counsel Mary B. Richardson-Lowry.  "The CMS 2025 Rule would have resulted in more than two million Americans losing health coverage while increasing out-of-pocket costs.  We are pleased that the Rule provisions were struck down."

The court's order eliminates several of the Rule provisions challenged by the City of Chicago, including: the $5 "junk fee" on automatic re-enrollees; the revocation of guaranteed insurance coverage for individuals with past-due premiums; and the changes to the de minimis ranges for actuarial value calculation which would have caused significant increases to families' annual health care costs. Read the decision here.

The City was represented in this lawsuit by lawyers from the Affirmative Litigation Division in its Department of Law.

Filed Under: Government, City
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