Washington has joined a multistate lawsuit that alleges new federal regulations will result in thousands of Washingtonians not registering for health insurance through the Washington Health Benefit Exchange and $100 million in uninsured and largely uncompensated hospital care costs.
The suit was filed against the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services.
The lawsuit, filed alongside 19 other states in a federal court in Massachusetts, alleges rules recently announced by the agencies will create destructive changes to the state’s insurance marketplace and health coverage subsidies.
“The Trump administration seems determined to undo the progress we’ve made in the past 15 years to help people get medical treatment when they need it,” Washington Attorney General Nick Brown said in a statement Thursday. “People in Washington deserve the health care coverage they’re entitled to under the law, and I will continue fighting to protect that access.”
The regulations, which take effect Aug. 25, impact a wide array of federal health care policy and funding across the country. According to the Centers for Medicare and Medicaid Services, the rule is expected to save up to $12 billion next year by reducing improper enrollments in Affordable Care Act exchange enrollments and reducing waste.
The Centers for Medicare and Medicaid Services also projects that health care premiums will be reduced by an average of 5%.
“We are strengthening health insurance markets for American families and protecting taxpayer dollars from waste, fraud, and abuse,” U.S. Health and Human Services Secretary Robert F. Kennedy, Jr. said in a June 20 statement. “With this rule, we’re lowering marketplace premiums, expanding coverage for families, and ensuring that illegal aliens do not receive taxpayer-funded health insurance.”
Under the rules, the Centers for Medicare and Medicaid Services will introduce new income verification requirements and exclude the recipients of Deferred Action for Childhood Arrivals from eligibility and enrollment in ACA exchange coverage. The DACA program allows people who came to the United States with no immigration status as children to remain in the country and obtain work permits.
“CMS is restoring integrity to ACA Exchanges by cracking down on fraud, protecting American taxpayer dollars, and ensuring coverage is there for those who truly need it,” Administrator Mehmet Oz said in a June 20 statement. “This is about putting patients first, stopping exploitation of the system, and realigning the program with the values of personal responsibility and fiscal discipline.”
According to the Attorney General’s Office, the final rule also removes the coverage of gender-affirming care as an Essential Health Benefit under the Affordable Care Act. While insurers in Washington will still cover the care as required by state law, the reclassification means that Washington will cover the costs of the care at an estimated annual cost of $1 million.
The state anticipates a yearly revenue loss of up to $10 million to the Washington Health Benefit Exchange due to a decline in coverage. According to the Attorney General’s Office, federal estimates show 1.8 million people will lose access to health insurance under the new rule.
“Everyone deserves affordable health care,” Gov. Bob Ferguson said in a statement Thursday. “Washington will stand with our partners across the country against the Trump administration’s efforts to strip away people’s health care. Reversing this unlawful rule will help thousands of Washingtonians hold on to their health coverage.”
According to the complaint, Washington is “simply not experiencing fraudulent enrollments on any serious scale” in health care exchanges, which it also told the agencies during an open comment period.
As the rule was drafted, a representative for the Washington Healthcare Exchange told the agencies that the expiration of premium tax credits would cause 80,000 qualified health plan enrollees in the state to lose their coverage and would be a “major disruption to customers’ ability to afford their existing coverage.”
The lawsuit alleges the rule is arbitrary and capricious and violates the Administrative Procedure Act.
“The federal rule from this administration puts up barriers to accessing care that people have counted on for years, makes health insurance more expensive for consumers, and shifts financial burdens to states,” Insurance Commissioner Patty Kuderer said in a statement. “Washington state has a stable insurance market today and strong provisions in place to protect against fraud and abuse in our marketplace.”