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TOPEKA – Kansas Attorney General Derek Schmidt and Gov. Jeff Colyer are touting a federal court ruling handed down Tuesday that says the federal government must repay hundreds of millions of dollars to six states – including $142 million to Kansas – for costs they were forced to pay through their Medicaid programs to help finance the Affordable Care Act, also known as Obamacare.

But Schmidt also said in a statement Wednesday that Kansas should not count on getting that money any time soon because the decision is likely to be appealed.

The case involves what is called the Health Insurance Provider Fee, which the federal government levies on insurance companies to subsidize the cost of discount insurance provided through federal and state exchanges, including Healthcare.gov.

An estimated 11.8 million Americans are covered by health insurance purchased through those exchanges in 2017, including 96,304 people in Kansas. The Health Insurance Provider Fee generates $14.3 billion a year to subsidize the cost of those plans.

Under the ACA, states were specifically exempted from having to pay those fees. But the fees do apply to private insurance companies that administer state Medicaid programs, as they do in Kansas under the KanCare system.

In 2013, the U.S. Department of Health and Human Services began requiring states like Kansas to reimburse those companies for the cost of the fees by building that cost into the rates that the states pay the companies.

In 2015, Kansas joined five other states, led by Texas, in filing a lawsuit challenging that policy, saying it violated several federal laws, including the ACA, as well as the U.S. Constitution. The states also sought a refund of the money they had paid out.

The other four states in the lawsuit are Indiana, Louisiana, Nebraska and Wisconsin, all of whom use managed care organizations, or MCOs, to administer their Medicaid programs.

In March, U.S. District Judge Reed O’Connor ruled that the policy was illegal. But he denied the states’ request for a refund, saying the states were not “taxpayers” entitled to a refund under the Internal Revenue Code and that the states weren’t the entities who actually paid the money to the federal government.

The federal government has appealed that decision to the 5th U.S. Circuit Court of Appeals. Meanwhile, though, the six states asked O’Connor to reconsider his decision not to award them compensation for the money they had paid out.

On Tuesday, O’Connor granted that request, reversed his earlier ruling and said that while the states are not entitled to a tax refund, they are entitled to monetary relief because the rule requiring them to account for the fees and reimburse their Medicaid MCOs violated a statutory mandate.

“The whole scheme was a two-step sleight-of-hand that had the effect of forcing states like Kansas to tax its citizens and then send the proceeds to the federal government,” Schmidt said in a statement Wednesday. “We’ve thought from the beginning this was one of the illegal provisions of Obamacare, and yesterday the federal court agreed.”

In a separate statement, Colyer said the ruling reinforces his longstanding criticism of the entire Affordable Care Act.

“This is just another example of the monumental failure of Obamacare and the expensive toll it has taken on our state,” Colyer said in the statement. “This fee has been illegally collected for far too long, and I am grateful to Attorney General Derek Schmidt for going to bat for Kansas and ensuring that a legal remedy was made for returning millions of dollars that should have never been taken from taxpayers in the first place.”

Schmidt said the total amount owed to the six states adds up to more than $839 million. He said Kansas’ share of that is just over $142 million. Schmidt said that’s the amount the state was required to reimburse the three KanCare MCOs from 2013 through 2015.

“This lawsuit is ongoing,” Schmidt said in the statement Wednesday. “Kansas budgeters should not bank on this money just yet. But yesterday’s ruling is well-reasoned and puts us in a much stronger position as our case goes up on appeal.”