Federal Court Awards Six States $839 Million in Medicaid Refunds

Published October 18, 2018

Louisiana Attorney General Jeff Landry said the millions his state is set to receive as a result of the ruling should be returned to Louisiana taxpayers immediately.

“[The] court victory not only means the IRS must repay the over $172 mil- lion that our Medicaid program was illegally forced to pay, but it also protects the State from having to pay mil- lions more in future fees,” Landry said in a statement after the ruling. “Once the money is returned to Louisiana, following any potential appeals, the Governor should return any net dollars directly to the hard-working Louisiana citizens who were forced to pay these costs.”

The U.S. District Court for the Northern District of Texas declared the federal government improperly charged the six states millions in Medicaid program fees that helped fund the Affordable Care Act (ACA). States began diverting Medicaid program fees toward the funding of ACA in 2010, when the ACA was passed.

Changing the Rules

Dr. Deane Waldman, director of the Center for Health Care Policy at the Texas Public Policy Foundation, says the refunds specified in the court’s August 21 decision are a direct result of the poor design of Obamacare and its premise that the federal government knows best.

“The need for refunds was generated because of a critical design flaw,” Wald– man said. “The root cause is micromanagement of the administration of health care by Washington, DC. If the feds did not tell everyone what they must do, in excessive and unnecessary detail, and if they did not constantly change the rules of the game, the lawsuit and subsequent refunds would not have been necessary.”

Calls for Repeal

The only real solution to the inefficiency and mismanagement of Obamacare is full repeal, as has been the case since the law was first passed, says Devon Her– rick, a health care economics researcher and policy advisor to The Heartland Institute, which publishes Health Care News.

“Republican members of Congress chose to live with Obamacare rather than do the heavy lifting required to replace it with a better plan,” Herrick said. “So, now we have these lawsuits that are trying to address Medicaid payments that never should have happened in the first place. Without repeal, Americans will be forced to endure the fallout from the Affordable Care Act until it collapses.”

Calls Rules Illegal

Waldman says the Obamacare Medicaid rules are illegal because the law establishing Medicaid calls for states, not the federal government, to administer and control the states’ programs. Waldman says federal agencies’ micro– managing of Medicaid feeds a bloated bureaucracy that reduces health care access and increases costs.

“Medicaid Law, Public Law 89-97, Section 1801, is quite clear just by its title: ‘Prohibition against any federal interference,'” Waldman said. “Each state, not Washington, DC, should administer and control its own program. Washington’s micromanagement is not just dollar-inefficient, it is illegal.”