MADISON, Wis. (AP) – Six states filed a new lawsuit Wednesday against the Obama administration over the Affordable Care Act.
The complaint that Texas, Wisconsin, Kansas, Louisiana, Indiana and Nebraska filed in the Northern District of Texas takes issue with the Health Insurance Providers Fee assessed to health insurers to cover federal subsidies.
The lawsuit says nothing in the Affordable Care Act’s language provided clear notice that states would also have to pay the fee.
“This notice was not even provided by rule but was ultimately provided by a private entity wielding legislative authority,” the suit says.
The suit seeks an injunction against the federal rules that say states are responsible for the fee. It also asks that states be refunded for what they’ve already paid.
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.
The suit says the fee is projected to allow the federal government to collect between $13 billion and $15 billion from states over the next decade.
Wisconsin Attorney General Brad Schimel’s office said in a statement that the state spent more than $23 million in such fees in 2014 and 2015.