NY, Minnesota sue Trump admin to block healthcare funding cuts

New York and Minnesota have filed a lawsuit seeking to block the Trump administration from cutting off federal funding for state programs that provide healthcare to hundreds of thousands of low-income people.

The lawsuit, filed on Friday in Manhattan federal court, seeks to restore more than $1 billion in funding for state health programs created under the Affordable Care Act, former President Barack Obama's signature domestic policy achievement, a statement from New York Attorney General Eric Schneiderman said.

New York and Minnesota are the only states that operate so-called Basic Health Programs, a type of health insurance plan for low-income residents authorized by the law, according to Schneiderman's statement.

In December, the U.S. Department of Health and Human Services (HHS) told both states it would cut off some of the federal funding for the programs because Congress had not appropriated money for them, according to the lawsuit. Schneiderman said the cut amounted to about 25 percent of the funding for New York's Basic Health Program.

About 800,000 people in both states are covered by the programs, according to the lawsuit.

A spokesman for HHS could not immediately be reached for comment.

(Corrects Basic Health Plan to Basic Health Program in paragraphs 3 and 4.)

(Reporting By Brendan Pierson in New York; Editing by Chizu Nomiyama, Susan Thomas and Frances Kerry)