Texas opens up new ObamaCare lawsuit

Texas opens up new ObamaCare lawsuit
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Three states are firing the latest volley in the court battles over ObamaCare with a new lawsuit filed Thursday over the law’s fee on health insurers. 

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Texas, joined by Kansas and Louisiana, is suing the Obama administration over the alleged “unconstitutional Obamacare tax.”

At issue is a fee that ObamaCare imposed on health insurers as a way to help pay for the law. Texas’s Medicaid program uses a system called managed care, in which the government contracts with private insurers to provide insurance for the poor. Part of the money that Texas gives to the insurers under this set-up reimburses them for paying the ObamaCare fee to the federal government. 

The three states are arguing that the fee is essentially being passed on to them and is unconstitutional federal coercion of states, because if they don’t pay the fee, they lose their federal Medicaid funds. 

“This threat to cut Medicaid funding to Texans unless the state continues to pay hundreds of millions in taxes to Washington amounts to the very ‘gun to the head’ the Supreme Court warned about in earlier rulings on Obamacare,” Texas Attorney General Ken Paxton, who has filed a range of lawsuits against the Obama administration, said in a statement. 

Texas is citing the 2012 Supreme Court ObamaCare ruling, which said that the federal government could not coerce states to expand Medicaid. 

The Supreme Court upheld the constitutionality of ObamaCare in 2012 and upheld the law’s subsidies earlier this year. 

This suit, as well as one from House Republicans on the Obama administration’s executive authority to pay out certain funds under the law, are still ongoing. 

After the House suit, called House v. Burwell, moved forward on Monday, the White House called for a stop to “endless lawsuits” over ObamaCare. 

The White House and Department of Health and Human Services referred questions on the new lawsuit on Thursday to the Department of Justice, which declined to comment. 

Tim Jost, a health law expert at Washington and Lee University and who supports the Affordable Care Act, said that the case did not appear very strong. 

He said it is simply the way the system works that “states do have to cover the costs of managed care organizations that cover Medicaid.”

The Supreme Court’s standard of coercion against states “really deals with very limited circumstances,” he said. 

Jost added that he thought the case was filed in the Texas district because the judge there, Reed O’Connor, has a history of ruling against federal regulations. 

Texas says it has to pay $120 million per year over ObamaCare’s health insurer fee and is asking for its money back through the lawsuit.