(Bloomberg) — Republican lawmakers are seeking a way to guarantee that health insurers get $7 billion promised to them to help low-income people afford the out-of-pocket costs of Affordable Care Act public exchange plans, in an effort to keep more companies from leaving markets created by the law.
The payments are threatened by a lawsuit that GOP House members filed during the Obama administration that argues the U.S. Department of Health and Human Services inappropriately funded the cost-sharing reduction subsidy program payments on its own, rather than going through the congressional appropriations process. Insurers have said they would consider nonpayment a breach of contract and may drop the plans mid-year, Rep. Greg Walden, an Oregon Republican who chairs a key health committee, told reporters in the Capitol on Thursday.
“I will do everything I can to make sure the cost-sharing reduction payments get made, especially this year where they were promised by the federal government under the contracts,” said Walden, chairman of the House Energy & Commerce Committee. “That’s an obligation not only to insurers but also to the people who took on those plans. We cannot leave them high and dry.”
Several big insurers have already retreated from the ACA, often called Obamacare, because of financial losses, and more may follow suit. UnitedHealth Group Inc. and Aetna Inc. have left ACA markets in most states, while Humana Inc. is planning to stop offering individual ACA plans entirely for 2018. Analysts at Jefferies wrote in a research note that Anthem Inc. is considering pulling back from the Obamacare market next year.
Separation of Powers
While the payments are being made as the issue works its way through the courts, the lawsuit heightens insurers’ uncertainty about whether the funds will continue to be available. House Speaker Paul Ryan said the suit concerns a vital issue and will continue.