Minnesota joined more than dozen states in a lawsuit hoping to protect federal payments to insurance companies – which they argue are vital for keeping health plans affordable for the poor.
Attorneys general from 15 states and D.C. are fighting to retain a critical feature of the Affordable Care Act, known as “cost-sharing subsidies.” These are payments made by the government to health insurers, in order to compensate for smaller deductibles and out-of-pocket costs for low-income consumers.
The states are intervening in a lawsuit issued by the House Republicans against the former Obama administration. They argued the spending was unconstitutional. This was accepted by a federal judge who ordered the payments be stopped, but then suspended the order so the government could go through an appeal.
Now that President Donald Trump is in charge of the executive branch, the 15 states and D.C. fear he will not actually appeal the decision.
Even though the White House has agreed to continue the payments – worth $7 billion – for now, previous comments Trump has made about letting Obamacare “explode” has prompted the attorneys general to intervene in the lawsuit.
What would the impact be on Minnesota?
Cost-sharing subsidies are used to help insurance companies provide affordable coverage for low-income people. They get subsidized health plans through the insurance exchanges created under the Affordable Care Act, such as MNSure.
The lawsuit argues that halting cost-sharing subsidies would lead to higher premiums for poor Americans, more uninsured people, higher costs for states, and insurance companies potentially leaving health exchange markets altogether. (That’s already happening in some areas.)
The lawsuit comes at a time when insurance companies themselves are waiting for guidance from the government, as they decide whether to continue providing coverage via Affordable Care Act exchanges in 2018.
What’s more, halting these federal subsidies could also bring an end to Basic Health Programs like MinnesotaCare. Under that program, cost-sharing subsidy money is given to state governments rather than health insurance companies, so states can run their own subsidized health program.
If the government was forced to stop cost-sharing payments, it would deprive Minnesota of $120 million in annual funding it uses to provide affordable health plans to 100,000 Minnesotans. (Those who are on low incomes but don’t quite qualify for Medicaid.)
It’s not the only threat facing MinnesotaCare. The state’s Department of Human Services told GoMN earlier this month the future of the program is at risk under the American Health Care Act passed by the House, which features stringent caps on government health subsidies from 2020 onwards. That bill still has not been voted on by the U.S. Senate however.