Minnesota will sue the Trump administration over its plans to stop federal payments that have reduced the cost of health insurance, Attorney General Lori Swanson said Friday.
Through legal filings and a late Thursday night announcement, President Donald Trump’s administration said that the payments were illegal because they had not been approved by Congress. But Swanson and other Democratic attorneys general say the payments are in federal law and insurance companies are owed them to keep state residents’ costs down.
The decision to stop the payments, which amounted to about $7 billion across the nation this year, ends a key facet of the Obama administration’s Affordable Care Act. Republicans in Washington have long said they want to repeal the ACA, known as Obamacare, but have not mustered the votes and a plan to do so since Trump took office.
The administration’s decision not to continue the funding was long threatened — and caused insurance companies in other states to increase the rates they plan to charge for next year’s coverage.
In Minnesota, however, the rates for insurance were set earlier this month and the administration’s decision will not increase them, Swanson and other state officials said.
MINNESOTA RATES SET FOR 2018
The insurance rates the state approved for 2018 already assumed the federal government would not give insurance companies the cost-sharing reduction payments.
“It is important for Minnesotans who purchase their health insurance on the individual market to know that 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,” said Minnesota Commissioner of Commerce Mike Rothman, Commissioner of Human Services Emily Johnson Piper and MNsure CEO Allison O’Toole in a joint statement.
Swanson said the federal payments should be there to help Minnesotans into the future.
“They are violating federal law by not making payments that are statutorily required. You can’t just end statutory payments, especially after you’ve been making them so long,” she said.
The health insurance payment suit is one of three active cases the state is waging against the Trump administration. The others relate to so-called Dreamers, immigrants who were brought to the country as children without proper documentation, and the rules for for-profit colleges.
The Trump administration said it would stop the insurance payments that were due next week and would not pay the costs going forward.
“The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system. Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people,” White House press secretary Sarah Huckabee Sanders said in a statement late Thursday.
The payments have long been in political dispute. Years ago, the U.S. House sued over the payments and received a positive decision. That decision was under appeal when the Trump administration decided not to defend the payment.
Democratic U.S. Rep. Betty McCollum, who represents St. Paul, said the president’s action was reckless.
“Trump has apparently decided on a backdoor sabotage that will dramatically increase costs for families in Minnesota and across America,” she said.
‘PIECE BY PIECE’
At 6 a.m. Central time Friday, Trump tweeted that he was planning to dismantle the Obama-era health care law. Thursday afternoon, the president also signed an executive order allowing an influx of insurance plans with fewer benefits than Obamacare required.
“ObamaCare is a broken mess,” the president said on Twitter. “Piece by piece we will now begin the process of giving America the great HealthCare it deserves.”
Separately, the Trump administration last month approved Minnesota’s plan for reinsurance, which lowered rates for those who buy their insurance outside of their employers or government programs. But in exchange, the administration said it would eliminate $369 million worth of federal funding for MinnesotaCare, which helps the working poor afford health insurance. The Dayton administration and Minnesota’s Democrats in Congress are fighting that decision.
The Dayton administration has said that decision, even if it is not rescinded, will not impact the MinnesotaCare program next year.
Still, with all the changes in Washington through presidential orders and failed attempts to rewrite the nation’s health care, the news could be worrying for those concerned about their health insurance.
“People are getting whipsawed and scared,” Swanson said. “You read the news and you don’t know what to make of it all.”