President Donald Trump's plan to cut off federal funds that were put in place to keep health premiums affordable for low-income Americans will move forward.
U.S. District Judge Vince Chhabria on Wednesday said the elimination of these cost-sharing subsidies wouldn't have nearly as dramatic an impact as opponents to the cuts allege – so the White House can indeed stop them, as announced earlier this month.
Seventeen attorneys general from across the U.S. – including Lori Swanson of Minnesota – joined together in a lawsuit to try to block the cuts. They argued it would mean more expensive health insurance for Americans buying through the Affordable Care Act.
But Chhabria didn't buy it (and even got a little snarky in his order), explaining their argument didn't acknowledge that tax credits for Americans will automatically increase if the cost of health insurance goes up. He also said many states have already comes up with plans to alleviate these cost increases.
Here's a snippet of his response:
"Why, in light of this discussion, have all these Attorneys General rushed to court seeking an emergency ruling against President Trump?
The primary reason offered by the states, and one they repeat over and over, is that premiums will go up for millions of people. But as already discussed, they are only able to make that argument sound compelling by omitting the fact that the premium increases in almost every state will cause tax credits to increase in a corresponding amount, leaving so many people (especially lower-income people) better off or unharmed."
Chhabria was appointed to the district court seat by former President Barack Obama, by the way.
The effect on Minnesota
What are these cost-sharing subsidies? It's money the federal government paid to health insurance companies to keep premiums affordable for Americans.
In 2017 the estimated pay out was about $7 billion, CBS reported.
There is worry that getting rid of those payments will make health insurance more expensive for the people who benefited from them. That's what led to the lawsuit from the attorneys general of 18 states, plus Washington D.C.
In Minnesota, things could be even more complicated because the state receives the payments – not insurance companies. The state then offers its own subsidized health plans under the MinnesotaCare program.
MinnesotaCare gets 85-95 percent of its funding from the federal government, of which $120 million comes from cost-sharing reductions – funding that could disappear as a result of Wednesday's order.