The U.S. Supreme Court has agreed to hear health insurers’ arguments about why they believe the United States of America owes them about $12 billion in Affordable Care Act risk corridors program subsidy payments.
The court today said that it will combine three separate appeals — filed by Maine Community Health Options, Moda Health Plan Inc. and Land of Lincoln Mutual Health Insurance Company.
The court has allotted a total of one hour of its time for oral arguments.
The court announced its decision to take up the case today, in an order list document.
From 2008 through 2010, when Democrats were in control of both the House and the Senate, they made the ACA risk corridors program a small part of their ACA legislative package.
One of the ACA drafters’ main goals was to help sick people buy health insurance, without having to worry about their applications being rejected, and without having to pay higher premiums.
Health insurers had been using health-based sales decisions and pricing decisions to try to hold down claim costs.
When the ACA drafters took those defenses against claim costs away, they tried to compensate by creating mechanisms that would send health insurers many young, healthy enrollees, and mechanisms for protecting health insurers against unexpected or unfair spikes in claim costs.
A new, temporary ACA reinsurance program was supposed to protect issuers of individual major medical coverage against individual enrollees with catastrophic claims.
A permanent risk-adjustment program was supposed to use cash from issuers with younger, health enrollees to compensate issuers with older, sicker enrollees.
The temporary risk corridors program was supposed to encourage insurers to sell coverage through the ACA public exchange system, by using cash from the thriving exchange plan issuers to help the struggling issuers, for plans years 2014, 2015 and 2016.
ACA Risk Corridors Program History
In theory, the risk corridors program was supposed to use cash from the healthy issuers to make the payments.
In reality, thriving issuers have made only enough payments for the program managers, at the U.S. Department of Health and Human Services (HHS), to meet only a small portion of the program obligations for 2014.