Employer group, cities sue RFK Jr. and others over 2026 Affordable Care Act exchange changes

The Main Street Alliance and other plaintiffs in the new suit predict that the regulations will hurt the ACA exchange system, hurt the individual health insurance market, and drive up the cost of the individual coverage available through the ACA exchange system.

The Main Street Alliance is a group for small businesses that support the Affordable Care Act and other federal social welfare programs.

Many alliance members send their employees to the ACA exchange system to get their health coverage, and "those members would be significantly harmed" by the new regulations, according to the plaintiffs' complaint.

"Small businesses often operate on small profit margins," the plaintiffs add.

If the new regulations make buying coverage through the ACA exchange system unaffordable, or the coverage available is inadequate, the owners and employees of alliance member companies "may be forced to seek alternative employment to have access to employer-sponsored health insurance," the plaintiffs say.

The plaintiffs have accused ACA exchange program managers of violating the federal Administrative Procedures Act, which governs how the federal government sets and changes regulations, by acting in a fashion that's contrary to law and is "arbitrary and capricious and without observance of procedure required by law."

The plaintiffs filed the complaint in the U.S. District Court in Maryland. In addition to the Main Street Alliance, the list of plaintiffs includes the city of Columbus, the mayor and city council of Baltimore, the city of Chicago and Doctors for America.

The defendants are HHS Secretary Robert F. Kennedy Jr., HHS, CMS, and Dr. Mehmet Oz, the CMS administrator.

The ACA exchange regulations: The ACA exchange system, or "Marketplace," provides a web-based supermarket for individual and family health insurance, and some small-group health plans.

Officials in the Trump administration seem to be assuming that the ACA exchange system will continue to exist.

An administration budget proposal shows that spending on exchange operations other than marketing might fall about 2.6%.

Spending on exchange marketing and navigator services could fall by about 86%, to $72 million.

The Trump administration said it needed to make ACA enrollment rules tougher to fight a big, obvious wave of enrollment application fraud. It predicts that its new anti-fraud regulations would cause the number of exchange users to fall sharply in the first year but then start to increase.

Related: Trump administration aims to save ACA exchange system from enrollment fraud

Democrats and groups that have backed the ACA framework have argued that the Trump administration budget proposal and the enrollment rule changes in the regulations would smother the exchange system.

Trump administration reaction: Andrew Nixon, an HHS spokesman, said in a statement that the new exchange regulation "exemplifies this administration's commitment to protecting consumers, lowering costs and safeguarding the future of the Marketplace."

"The rule closes loopholes, strengthens oversight and ensures taxpayer subsidies go to those who are truly eligible," Nixon said. "That's not controversial, it's common sense. Contrary to the claims asserted by liberal mayors and various organizations, this rule will lower individual health insurance premiums by approximately 5% on average providing real relief for American families who rely on the Marketplace. It strengthens, not weakens, access by making the system more stable, fair and sustainable."