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Rubio: PPACA reinsurance program should pay Treasury first

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Marco Rubio is trying to push the Obama administration to reduce the amount of Patient Protection and Affordable Care Act (PPACA) reinsurance program cash that goes to health insurers.

Rubio, one of the Republican presidential candidates, says PPACA requires the U.S. Department of Health and Human Services (HHS) to send billions of dollars of reinsurance program revenue to the U.S. Treasury before it can send any to health insurers.

See also: How the fifth Republican debate could reshape the race

The representative for Florida in the Senate, who serves on the Senate Finance Committee, Rubio has joined with the chairman of the committee, Sen. Orrin Hatch, R-Utah, to try to change how HHS is using the reinsurance program revenue.

Rubio and Hatch are blasting the current HHS approach in a letter addressed to HHS Secretary Sylvia Mathews Burwell and Treasury Secretary Jacob Lew. They both write in the letter that they “are disappointed with the administration’s willingness to unlawfully direct money to health insurers at taxpayers’ expense.”

“This is unacceptable,” Rubio and Hatch write. “The statute in question is unambiguous, and the HHS regulation and practice violates its clear directive.”

PPACA Section 1341 calls for the reinsurance program to use fee revenue from major medical coverage issuers to help individual coverage providers pay the bills of enrollees who file catastrophic claims in 2014, 2015 or 2016.

HHS should collect $12 billion in reinsurance revenue from coverage providers for 2014, $8 billion for 2015 and $5 billion for $2016, according to PPACA.

HHS should send $2 billion of the reinsurance program revenue to the U.S. Treasury for 2014, $2 billion for 2015, and $1 billion for 2016, according to the statute.

HHS said in a regulation released in May 2014 that it would send reinsurance program cash to the Treasury for 2014, only if it collected at least $8 billion that it could use to pay health insurers’ reinsurance claims.

In April 2015, the reinsurance program appeared to be on track to collect $9.7 billion in revenue for 2014, according to data the Center for Consumer Information & Insurance Oversight (CCIIO), an arm of HHS, released at that time. However, CCIIO has not released a 2014 reinsurance program revenue data.

CCIIO officials said in a memo posted in February that the reinsurance program may collect about $6.5 billion for 2015. Officials said they would use $1.7 billion of the reinsurance program cash collected for 2014 to increase the total amount of cash available for 2015 to about $7.7 billion.

Rubio and Hatch contend that the HHS regulation contradicts the statute by having the program pay the insurers before the program sends payments to the Treasury.

“The statute could not be clearer that these funds are not part of the reinsurance program, but rather an offset to the enormous expense Obamacare erroneously places on taxpayers and the U.S. Treasury,” Hatch and Rubio write in the letter.

The senators are asking whether HHS sought the Treasury Department’s opinion on the issue and what opinion was provided. They are also asking what the Treasury Department’s current position is, and whether Treasury plans to recoup the reinsurance program funds.

And both senators are asking HHS and the Treasury Department to reply by March 25. 

See also:

Feds create PPACA reinsurance program Web page

CMS Moves Ahead with Reinsurance Project


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