ST. PAUL, Minn. - Minnesota will join other states in a new lawsuit against the Trump Administration, in an effort to continue federal subsidies that help buy down the cost of private insurance for lower income customers.
It's a response to President Trump's decision late Thursday to end Cost Sharing Reduction, or CSR, payments. That money, about $7 billion a year, has been flowing to states since 2014. The loss of that revenue will hit insurers and state coffers alike.
The Trump Administration contends the payments aren't legal because Congress never passed legislation appropriating funds for CSR payments. Defenders of the subsidies say they're covered by the Affordable Care Act's mandate that discounted plans be offered.
"The Affordable Care Act says the Treasury Department and Health and Human Services shall make periodic and timely payments to reimburse insurance companies," Minnesota Attorney General Lori Swanson told reporters Friday.
Swanson is joining at least 20 other state attorneys general seeking a temporary restraining order that would ensure the CSR payment due October 18 arrives on schedule.
"The legal argument is that they’re violating federal law by not making payments that are statutorily required," Swanson told reporters at her office in the State Capitol. "You can’t just end statutory payments, especially after you’ve been making them for so long."
Those CSR subsidies help insurers cover those who make less than 250 percent of the federal poverty line. The income cap varies by family size but, for example, is $61,000 for a family of four. Roughly 11,000 Minnesotans in that income group still buy private health insurance, via the MNsure exchange.
Most of the people in that income bracket enroll in Minnesota Care, the state's health plan for the working poor. That plan is paid for, in large part, by a fee on medical providers. But $100 million in federal subsidies also flow into that program.
In Wisconsin and 48 other states, people in that income group buy private plans. The sudden loss of CSR subsidies could increase premiums by 20 percent according to some estimates.
Senator Al Franken reacted sharply to the president's latest actions, including the executive orders and the decision to halt the CSR payments.
"It’s going to drive up the cost of health care and it’s going to drive up our deficit at the same time," Sen. Franken said, citing the scoring done by the nonpartisan Congressional Budget Office.
"This is so damaging to people. It’s an amazingly destructive thing to do."
The heads of three state agencies said insurance rates for 2018 had been set, and wouldn't be affected.
"While the President’s action will almost certainly create higher health insurance costs in the years ahead, it will not immediately impact health insurance rates or federal tax credits available during Minnesota’s upcoming open enrollment period," read a joint statement by Commerce Commissioner Mike Rothman, Human Services Commissioner Emily Piper Johnson and MNsure CEO Allison O'Toole.
The federal tax credits the commissioners referenced are instant discounts available to those who earn up to 400 percent of the federal poverty line. Those tax credits aren't affected by President Trump's action on the CSR subsidies.
This will be the second court battle over the CSR payments. US House Republicans in 2014 sued the Obama Administration, attempting to block the payments, citing the same lack of appropriations. The lawmakers won the first round in federal court but the Obama Administration appealed it.
When it became clear the Trump Administration wouldn't take up the fight, Minnesota and other states intervened in the case in order to defend the CSR payments. But that first case has been on hold, or in abeyance, based on the notion that Congress will find a political resolution to the dispute.
Trump filed a motion in that first case, notifying the courts the government is stopping payments because the White House agrees with Republican lawmakers who brought the original lawsuit.
There are concern that the loss of CSR payments could eventually impact the larger group of 100,000 Minnesota Care enrollees, but Attorney General Swanson said the latest order from the Trump Administration wouldn't have an immediate impact on that program.
The president's action on the cost-sharing subsidies came hours after he signed an executive order that would allow persons to buy health plans that don't contain the all of the minimum coverage required by the Affordable Care Act. The orders would also remove barriers to buying policies sold in other states.
AG Lori Swanson announces Minn will join other states in lawsuit over President's move to end health care subsidies pic.twitter.com/5VKWWC1jgW— John Croman (@JohnCroman) October 13, 2017