Dive Brief:
- While state Medicaid agencies applaud Congress' one-year suspension of the Affordable Care Act's tax on health insurers, they say that should just be the beginning, and the tax should be abolished entirely, Modern Healthcare reports.
- 38 states and the District of Columbia are impacted because they contract with Medicaid managed-care plans and have to cover the tax on those plans.
- There is currently a lawsuit underway in which six states argue nothing in the ACA said they would be responsible for the tax and seeks refunds for what states have already paid.
Dive Insight:
The decision on whether to reinstate or kill the tax could have major financial repurcussions. The move to suspend it for a single year will already cost the federal government $13.9 billion, Modern Healthcare reports, which is money that would have gone toward Medicaid expansion and premium subsidies.
The one-year suspension came as part of Congress' late 2015 omnibus budget bill, alongside two-year suspensions of the ACA's medical-device tax and "Cadillac" tax on high-cost employer-sponsored health plans. Some experts suggest these unpopular ACA taxes are unlikely to ever be reinstated, though their end could bode poorly for ACA coverage expansion that is designed upon these sources of funding.