Minnesota sues Trump administration over health insurance funding

Attorney General Lori Swanson announced a lawsuit Friday against the federal government to halt an expected $130 million cut to MinnesotaCare, which provides insurance to low-income Minnesotans. The state of New York, which has a similar program, is also a plaintiff in the case.

"For each dollar Minnesota sends to Washington, D.C., we get just 53 cents back," said Swanson. "This lawsuit seeks to avoid Minnesota losing hundreds of millions of dollars of payments in the coming years."

MinnesotaCare covers about 89,000 residents who earn too much to qualify for other government insurance programs, but cannot afford private insurance plans. Income eligibility for a family of four is between $32,718 and $49,200.

"MinnesotaCare is a vital part of our state's strong commitment to ensuring Minnesotans have access to quality healthcare," Human Services Commissioner Emily Piper said in a statement supporting Swanson's lawsuit. The suit was filed in U.S. District Court for the Southern District of New York.

The state insurance program was created in 1992. Under the Affordable Care Act, states could expand the income eligibility requirements for government insurance programs mostly with federal funding.

In Minnesota, that led to more people enrolling in MinnesotaCare with the federal government picking up 95 percent of the cost. New York has a similar program called the "Essential Plan" that insures more than 700,000 residents with a government subsidy of $1 billion.

In December, the Trump administration told the Minnesota Department of Human Services, which oversees MinnesotaCare, that it would no longer cover the cost of the expansion. Swanson's lawsuit seeks to restore that funding.

The Trump administration has also moved to end subsidies for people buying insurance on the individual market, which is accessed thru MNsure in Minnesota. Trump has argued the government cannot pay the subsidies without congressional approval.

Swanson and other state attorneys general are also seeking to restore that funding.

MinnesotaCare could also take another financial hit tied to the Affordable Care Act. State officials learned last year that a reinsurance program approved by the Legislature could lead to the loss of $277 million in funding for the state insurance program by the 2019 fiscal year.

The reinsurance program set aside $542 million over two years to help insurers cover the cost of large claims. The moved help stabilize the market and keep rate increases low.

MNsure's open enrollment period ended Jan. 14 with 116,358 signups, a little more than a 1 percent increase over the year before.