TOPEKA, Kan. (Legal Newsline) - Kansas Attorney General Derek Schmidt announced he will lead a coalition of 13 states in opposing the federal government’s proposed plan to tax states to pay for allegedly expensive health care reforms mandated under the Affordable Care Act.
Schmidt took action by filing a brief with the U.S. Court of Appeals for the Sixth Circuit in Cincinnati. The brief urges the court to reject “transitional reinsurance” tax on governmental health plans, a policy the Obama administration is trying to institute.
“By forcing state governments to absorb the financial burden of implementing a federal regulatory program, the federal government can take credit for ‘solving’ problems without having to pay for the solutions with higher federal taxes,” Schmidt said. “If the transitional reinsurance tax is imposed in this manner, then the states will then be required to tax their citizens to pay for federal expenses despite the states’ longstanding sovereign immunity from federal taxes. If the federal government can commandeer state treasuries this way, this certainly will not be the last time it will do so.”
The transitional reinsurance program is a way to offset the cost of the federal health care reforms from 2015 to 2017. The program aims to raise $25 billion by taxing certain health insurance issuers and group health plans for each enrollee in benefit years 2014 to 2016. The government has attempted to apply this tax to state governmental health plans.
Kansas paid almost $4.5 million for benefit year 2014 and more than $2.3 million in the first installment of 2015, all under protest.