Texas is one of six states suing the Obama administration over a fee funded by states and awarded to health insurers to help cover federal subsidies.
Texas, Indiana, Kansas Louisiana, Nebraska, and Wisconsin each joined a suit last week filed in the Northern District of Texas to challenge the Health Insurance Providers Fee. The suit wants a refund for what has already been paid and asks a judge to issue an injunction against the rules.
In a statement, Attorney General Ken Paxton says the “unconstitutional tax” will eventually cost the state more than $120 million each year. In all, the suit alleges that the fee will allow the feds to scoop up somewhere between $13 billion and $15 billion despite language in the Affordable Care Act not clearly stating that states would need to pay it. As The Associated Press reports:
The federal government has determined states must pay a portion of the fee to their Medicaid managed care organizations to then pay to the federal government. States get some reimbursement from the federal government for that money, but they end up losing 54 cents for every dollar of the insurance tax.
Texas filed the original suit last October.