Connecticut Attorney General William Tong joined a multi-state lawsuit in yet another legal battle against the Trump Administration. This time, Tong is opposing the expansion of eligibility for catastrophic health insurance plans.
Catastrophic health insurance plans have low monthly premiums and high deductibles. They offer security for “worst-case” scenarios, like serious injuries or illnesses, while keeping the cost of health insurance low. Under the Affordable Care Act (ACA), they are only available for people younger than 30; however, there is a “hardship exemption,” which allows people under 65 to get plans based on their income. Eligible people can get catastrophic health insurance plans through the ACA and some private carriers.
In September 2025, officials at the Federal Department of Health and Human Services (HHS) announced hardship eligibility for catastrophic health insurance plans. Then, in May, HHS officials issued new guidelines for catastrophic health plans in its 2027 Notice of Benefit and Payment Parameters, which, among other things, allowed plans to have out-of-pocket costs above the ACA standards and reinstated several provisions about health care plans from the HHS’ 2025 ACA Marketplace Rule that had previously been struck down in federal courts.
In response to these new guidelines, Tong, 21 other state attorneys, and Pennsylvania Governor Josh Shapiro sued HHS to block this expansion.
In their lawsuit against HHS and other officials, Tong and the other Plaintiffs argue that the new guidelines “impose burdensome requirements upon states and their agencies and regulators” and “will decrease enrollment and increase costs for millions of Americans who rely on the ACA to afford health coverage for themselves and their families.”
The HHS estimated that the new provisions in the 2027 Notice will decrease ACA enrollment by five million people between 2026 and 2030. Furthermore, the Plaintiffs allege that the new regulations will “damage the ACA’s single risk pool, shift costs to enrollees, and impose substantial burdens on states.”
An increase in the number of consumers choosing catastrophic health insurance plans would decrease the pool of money available to subsidize other ACA plans.
The lawsuit continues: “These changes are contrary to the text and purpose of the ACA and will inexorably lead to higher costs and lower enrollment for consumers, higher uncompensated care costs for providers and state agencies, and substantial compliance costs for state-based exchanges.”
“Trump is once again trying to jack up healthcare costs and make it harder for American families to get the coverage they need,” Tong said in a press release from his office. “The courts have already rejected key parts of the Trump administration’s attack on the Affordable Care Act, but it has come back with another unlawful, reckless rule. We’re suing to protect affordable healthcare for Connecticut families.”
On an individual level, there are two possible outcomes for buying a catastrophic health plan with lower coverage, but higher deductibles: people who do need an unexpected and expensive treatment will have to pay more for treatment, but people who do not have a serious medical condition will most likely save money on health insurance plans.
In a press release from September, HHS Secretary Robert F. Kennedy, Jr. said, “Catastrophic coverage offers affordable health insurance for younger Americans and those facing hardship to have security when they need it most. Expanding access to catastrophic coverage is another step in making health insurance more affordable.”
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