New York Attorney General Eric Schneiderman and Minnesota Attorney General Lori Swanson announced they are suing the Trump administration for cutting billions from the states’ low-income health insurance program. The attorneys general say HHS “withheld legally-required funding owed” to the states.
The two states are the only ones with Basic Health Programs, which were created under the Affordable Care Act. States in the BHP can offer coverage to people who don’t qualify for Medicaid, the Children’s Health Insurance Program or other coverage and have incomes between 133% and 200% of the federal poverty level.
The BHPs, which haven’t caught on in other states, are primarily funded by the federal government.
In the lawsuit, New York and Minnesota are challenging the HHS cutting off federal funds to the program. They charge that the agency’s actions violate the Administrative Procedure Act.
The two states' BHPs cover more than 800,000 people combined, including New York’s Essential Plan that covers more than 700,000 low-income New Yorkers. States with a BHP receive federal funding equal to 95% of the premium tax credits and cost-sharing reductions (CSRs) that the federal government would have otherwise needed to spend if people on those plans were on an ACA exchange plan.
The plans don’t have deductibles and the premiums are based on income. Some members don’t pay any premiums, while others pay as much as $20 a month. Minnesota and New York both started their Basic Health Program in 2015.
“For each dollar Minnesota sends to Washington D.C., we get just 53 cents back,” Swanson said. “This lawsuit seeks to avoid Minnesota losing hundreds of millions of dollars of payments in the coming years.”
Schneiderman called the state’s Essential Plan a lifeline for low-income New Yorkers and added that the cuts were a “cruel and reckless assault" on New York’s families. “I won’t stand by as the federal government continues to renege on its most basic obligations in a transparent attempt to dismantle the Affordable Care Act. We’re suing to defend these vital funds and the quality, affordable health care they ensure for New Yorkers,” he said.
We won’t stand by as the federal government reneges on its most basic obligations in a transparent attempt to dismantle the Affordable Care Act. https://t.co/c1UElzF8vF— Eric Schneiderman (@AGSchneiderman) January 26, 2018
Schneiderman’s office said the HHS cut off 25% of federal funding to the program last month, which is more than a $1 billion loss. In response, the states reportedly submitted proposals to HHS to restore funding, but the agency didn't respond, according to Schneiderman.
The lawsuit involves just two states, but the funding cuts are the latest in a set of moves by the Trump administration to weaken the ACA and put its own stamp on the healthcare system.
The administration's new policies and executive orders include the nixing regulations, taking aim at the ACA including cuts to open enrollment funding, allowing a Medicaid waiver to Kentucky to require Medicaid recipients to work, expanding association health plans and catastrophic health plans and a proposal to allow states to decide whether payers must provide the ACA’s 10 essential health benefits.
It’s also not the only lawsuit in response to the Trump administration’s actions. Medicaid recipients in Kentucky this week sued the HHS and are seeking to block the work requirement waiver, which they said exceeds the agency’s authority.