New York state and Minnesota allege, in a federal lawsuit filed today in New York City, that the Trump administration is wrongfully withholding more than $1 billion in public health insurance program funding.
The administration’s decision to withhold the payments from Affordable Care Act Basic Health Program plans is jeopardizing access to health care for about 800,000 people, the states say in the complaint.
The suit comes in response to the Trump administration’s decision to withhold payments from the Basic Health Program. Drafters of the Affordable Care Act created the program in an effort to let states provide subsidized insurance coverage for low-income people who earn too much to qualify for Medicaid.
To run a Basic Health Program plan, a state needs federal funding. The state is supposed to get most of the subsidy cash the enrollees would have received if they were using Affordable Care Act advanced premium tax credit subsidies to pay for health coverage purchased through an Affordable Care Act public exchange program.
New York state and Minnesota are the only states that have set up Basic Health Program plans.
The program plans are known as the Essential Plan in New York and as MinnesotaCare in Minnesota
New York state and Minnesota are asking for declaratory and injunctive relief. They name the U.S. Department of Health and Human Services (HHS) and Acting HHS Secretary Eric Hargan as defendants.The U.S. Senate approved Alex Azar for secretary of HHS on Jan. 24.
HHS declined to comment on the lawsuit.
Cost-Sharing Reduction Subsidy Cut-Off
The Affordable Care Act premium tax credit subsidy program is supposed to help people with income equal to 138% to 400% of the federal poverty level, or from 100% to 400% of the federal poverty level in some states, pay private health insurance premiums.
The ACA cost-sharing reduction subsidy program is supposed to help exchange plan premium subsidy users with income below 250% of the federal poverty level handle the cost of plan deductibles, co-payments and other cost-sharing amounts.
Officials in the Obama administration argued that a permanent premium subsidy appropriation in the Affordable Care Act also applies to the CSR subsidy stream.