The US states of Minnesota and New York have brought a lawsuit against the Trump Administration in an attempt to recover $1 billion in federal funds they say have been illegally cut off and that are due to them for providing low cost, basic health care plans (BHPs) under the terms of the Affordable Health Care Act, New York Attorney General Eric Schneiderman said in a press release.

“”The lawsuit, which was filed today by Attorney General Schneiderman and Minnesota Attorney General Lori Swanson in the US District Court for the Southern District of New York, details how the US Department of Health and Human Services (HHS) – without adequate justification and in disregard of lawful procedure – withheld legally-required funding [of over $1 billion] owed to New York and Minnesota to operate their BHPs,” the release said on Friday.

New York and Minnesota are the only US states that operate BHPs, which provide health insurance to more than 800,000 people, the release added.

The New York’s BHP, known as the Essential Plan, covers 700,000 low-income New York residents, the release said. The state-sponsored program is a creature of the Affordable Care Act, receiving, and depending upon, most of its funding from the federal government.

“Despite New York’s tremendous success in implementing this federally-created program, in December 2017 HHS abruptly determined that it would cut off 25 percent of the federal funding owed to New York to operate the Essential Plan — a loss of over $1 billion in mandatory federal funding over just one year,” the release said.

HHS at the same time also cut off BHP funding for Minnesota on the bases of “the same flawed procedures and inadequate justifications,” it added.

The lawsuit challenges the federal funding cuts, “as well as its failure to respond to, and consequently its failure to adopt, the states’ reasonable alternative funding proposals,” the release said. The two states are seeking the restoration of funding from HHS.

Minnesota’s Swanson said in the release that her state stands to lose “hundreds of millions of dollars” in federal funds in the coming years.

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