Minnesota joins lawsuit over Trump health payments

Updated 3:35 p.m. | Posted 3:08 p.m.

State Attorney General Lori Swanson said Friday Minnesota would join other states in a lawsuit aimed at protecting federal health care subsidies for insurance companies.

Swanson's announcement came after the White House said President Trump would halt cost-sharing reduction payments next week. Those subsidies help hold down the cost of premiums and co-payments for some people who buy private coverage under the Affordable Care Act.

Swanson said the main legal argument in the lawsuit is that those payments are required under the law.

"You can't just end statutory payments, especially after you've been making them for so long," she said. "You can't just say 'Well, sorry, the next one's not going to be paid.'"

Swanson said nearly 11,000 Minnesota consumers currently benefit from the buydown.

"For them it's a real issue. This is a lot of money. Health care is so expensive already and anything that can help buy down the premiums is welcome news, certainly for those families."

Swanson said Minnesota and other states in the lawsuit are seeking an injunction to keep the subsidy payments going to insurers.

Attorneys general from California, Connecticut, Kentucky, Massachusetts and New York are among those who said they would file the lawsuit in federal court in California.

Trump also cuts about 25 percent of the funding for MinnesotaCare, the subsidized health plan covering about 90,000 low- and moderate-income Minnesotans.

Scrapping "cost sharing reductions" will cost MinnesotaCare about $100 million a year, said DFL Gov. Mark Dayton. He called the move "destructive" and "cruel hearted."

MinnesotaCare has enough money in reserve to keep the program going through next year, he added. Dayton said he's urging those enrolled in MinnesotaCare to rest assured their coverage is not in jeopardy anytime soon.

"I don't want anybody out there who's on MinnesotaCare to worry that they're not going to have the benefits that they've been accustomed to and that they need for themselves and their families," he said.

The intended cut in cost-sharing payments follows a prior financial hit to MinnesotaCare from the Trump Administration. About a month ago, the Trump administration reversed course and said the program would lose $369 million in funding over two years.

The surprise cut was attached to the administrations approval of a state application to spend $542 million on reinsurance. That's a financial safety net program for insurers that designed to help consumers by holding down premiums.

Minnesota should abandon the plan and find a better way to use the money earmarked for reinsurance, said state Sen. Tony Lourey, DFL-Kerrick.

"We could cut a much better deal for the people of Minnesota using that money in a different matter that doesn't result in the loss of federal money," he said. "Minnesotans in the Legislature ought to look at this deal and realize that their team in Washington is throwing Minnesota under the bus."

Democrats and Republicans should figure out a new way to bring down premiums with the money, Lourey said, adding that one option would be to extend a state premium discount program that ends with the new year.

That might be a good idea given what's happening with MinnesotaCare funding, said state Senator Jim Abeler, R-Anoka.

"That would require a special session and cooperation and so my call would be, 'This is serious. Let's sit down. Let's cooperate. Let's work together,'" he said.

The calendar, however, is a problem.

Open enrollment for next year starts in less than three weeks, and state regulators finalized rates based on reinsurance being in effect.

Dayton has until Oct. 20 to formally sign off on the reinsurance wavier. His staff declined to comment on whether he would consider a special session to come up with an alternative.