Paxton sues feds over Obamacare fee on health insurers

AUSTIN — Texas Attorney General Ken Paxton has sued the Obama administration over an Affordable Care Act fee on health insurers that applies to private insurers under Medicaid — and thus has become a hit to state budgets.

Joining his counterparts in Louisiana and Kansas, Paxton on Wednesday sued Health and Human Services Secretary Sylvia Burwell and IRS Commissioner John Koskinen to challenge the federal law’s “Health Insurance Providers Fee.”

While it applies to commercial insurers in the private market, it also affects so-called Medicaid managed care organizations. In Texas, they cover 87 percent of the state’s 3.7 million Medicaid enrollees. The state pays the companies an up-front sum, and part of that is reimbursing them for the new federal fee.

In fiscal 2013, the fee for managed care companies participating in Medicaid and the Children’s Health Insurance Program cost state taxpayers $85 million. In the current two-year state budget cycle, the burden is about $241 million, Paxton’s brief says.

Read more including updates to the story at http://trailblazersblog.dallasnews.com/2015/10/paxton-sues-feds-over-obamacare-fee-on-health-insurers.html/ .

The Austin American-Statesman also has an article that indicates that Paxton went forum shopping by filing suit in Wichita Falls rather than in Travis County. That article is at http://www.statesman.com/news/news/ken-paxton-sues-to-scrap-obamacare-fee/nn7yZ/ .