Health Insurance Provider Fee, which is really a tax, may be the linchpin for the collapse of Obamacare

Despite the fact Obamacare hasn’t been “repealed and replaced” as promised by GOP members of the Congress, six states have just won a multi-state lawsuit against the tax policies implemented by Obamacare.

Attorney General Ken Paxton today commended a U.S. District Court decision ordering the Internal Revenue Service to repay Texas and five other states more than $839 million because of an unlawful Obamacare tax on state Medicaid programs…. “Obamacare is unconstitutional, plain and simple,” Attorney General Paxton said. “We all know that the feds cannot tax the states, and we’re proud to return this illegally collected money to the people of Texas.” In October 2015, Attorney General Paxton led a multistate lawsuit against the federal government over the Obama-era regulation that threatened to choke off Medicaid funds for the health needs of millions of Texas citizens unless Texas taxpayers paid a portion of the Health Insurance Providers Fee to help fund Obamacare.

The monies Texas and the other states are to receive in this judgment are as follows:

Texas: $304,730,608.

Indiana: $94,801,483

Kansas: 142,121,776

Louisiana $172,493,095

Wisconsin: $88,938,850

Nebraska: $36,238,918

The “tax”, which was marketed as a “fee”, may be the linchpin for the collapse of Obamacare, as the example of Kansas shows.

The fee, called the Health Insurance Provider Fee, is one part of the Affordable Care Act enacted under President Barack Obama. The federal government imposed the HIPF on medical providers but states were exempt. Kansas, being a state that contracts with private managed care organizations to operate Medicaid programs, was hit with the fee. The reason, Kansas Attorney General Derek Schmidt says, is the federal government imposed the fee on the private care organizations, then adopted a regulation requiring the organizations to pass the cost to the state. Schmidt said the federal government was collecting the money illegally. Kansas, along with Indiana, Texas, Louisiana, Nebraska and Wisconsin filed a lawsuit claiming this fee was an issue back in 2016.

Indiana’s Attorney General is delighted with the ruling.

“The feds wrongfully took Indiana’s money to fund Obamacare,” said Attorney General Curtis Hill said. “Since the federal government cannot tax the states, we are pleased to return this illegally collected money to Hoosiers.” Hill’s office said Indiana joined the multistate lawsuit when “federal authorities threatened to withhold Medicaid funds unless state taxpayers paid a portion of the Health Insurance Providers Fee to help fund the Affordable Care Act, otherwise known as Obamacare.”

Nebraska’s Attorney General Doug Peterson echoed those sentiments.

“The federal government is not able to tax the states because of the unconstitutional constructs of Obamacare,” Attorney General Peterson said, “and the portion illegally collected from Nebraska should be returned to our state.”

According to Paxton’s office, Texas and Wisconsin will argue at a hearing on September 5 that Obamacare, as amended by the recent tax bill, is unconstitutional in its entirety.

Perhaps the courts, filled with Trump-appointed judges, may do the job Congress was unable to do.



