Since President Trump and the Department of Health and Human Services cut 
cost-sharing reductions in October, some states have brought a lawsuit against the government. The lawsuit centers on the loss of federal funding, which jeopardizes basic health programs.
The Basic Health Program offers an alternative coverage plan for people with household incomes between 133 and 200 percent of the federal poverty level. The ACA included this as an option to make coverage more affordable. New York and Minnesota were the two states in which these programs were offered in order to provide a “standard plan” for those who didn’t qualify for employer coverage or other government programs. It is estimated that they offer comprehensive coverage for more than 800,000 low-income people.
The attorneys general of New York and Minnesota filed the suit against the government for over $1 billion a year lost from funding the basic health programs. The two states estimate that New York will get about $1 billion less funding in 2018 to run its Essential Plan, and Minnesota will get about $130 million less to run MinnesotaCare.
“The abrupt decision to cut these vital funds is a cruel and reckless assault on New York’s families — and we will not allow it,” state Attorney General Eric Schneiderman said in a statement trumpeting the suit. “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.”
“For each dollar Minnesota sends to Washington, D.C., we get just 53 cents back,” Minnesota Attorney General Lori Swanson said in a statement. “This lawsuit seeks to avoid Minnesota losing hundreds of millions of dollars of payments in the coming years.”
The administration told the states it would stop paying the “cost-sharing reductions component” of the basic health program funding, but continue to pay premium tax credits.
The two states have submitted proposals to restore the funding, but the Department of Health and Human Services failed to answer, and never considered the proposals. Because of this, the two states are asking a judge to intervene in order to force the government to pay the full federal funding.
The fear amongst the two states is that if the federal funding is not restored, and then costs will rise and coverage will shrink. “It could trigger major changes to the eligibility structure, the benefits or increases in premiums,” says Maureen O’Connell, president of Health Access MN, which helps people enroll in marketplace coverage.
