Indiana is one of six states to join a lawsuit against a multimillion-dollar fee connected to the Affordable Care Act.
The states argue the Health Insurance Providers Fee, which state governments must to pay the federal government in accordance with the Affordable Care Act, violates the Constitution and several statutes.
The lawsuit, filed by Texas, does not affect people with health insurance through the ACA or employers. Instead, it would affect the shift of tax dollars from state governments to the federal government.
“We contend it is unconstitutional under intergovernmental tax immunity for the federal government to impose a tax upon a state government, and that’s what this fee does,” said Indiana Attorney General Greg Zoeller in a press release.
In 2014, Indiana was required to pay $17.4 million for the Health Insurance Providers Fee under the ACA. That amount is expected to increase as more enrollees are added to Indiana’s Medicaid programs.
“States now have no choice but to pay this tax or risk the loss of their essential federal Medicaid funding that underpins patient coverage for our neediest citizens,” Zoeller said in a press release. “The only avenue for questioning the legality of this is to bring the question to the federal court and let the court decide.”
The Texas Attorney General’s Office is handling the majority of the legal work in the case. Salaried attorneys in the Indiana Attorney General’s Office are working on Indiana’s behalf. Indiana is not using outside counsel to participate in this lawsuit.