Health insurers are now pleading with the U.S. Supreme Court to get it to make the rest of the federal government to pay $12.4 billion in Affordable Care Act (ACA) risk corridors program bills.
The insurers — Maine Community Health Options, Land of Lincoln Mutual Health Insurance Company, and Moda Health Plan Inc. — have filed petitions in connection with their suits against the United States of America.
Moda Health says in its brief that the question presented is, “Whether Congress can evade its unambiguous statutory promise to pay health insurers for losses already incurred simply by enacting appropriations riders restricting the sources of funds available to satisfy the government’s obligation.”
“That bait-and-switch is legally indefensible and enormously consequential,” the company says. “The government’s view that it may promise boldly, renege obscurely, and avoid both financial and political accountability for retroactively depriving private parties of billions of dollars in reliance interests is truly remarkable.”
Maine Community Health Options says letting the United States avoid paying the risks corridors program bills would violate federal government payment principles.
“Legislative inaction, and legislative history not reflected in statutory text, cannot retroactively repeal a statutory obligation of the United States,” the company says. ”In this case, the unambiguous language of the relevant statutes should have compelled judgment for insurers. Insurers relied on the unequivocal statutory direction in Section 1342 of the Affordable Care Act that the government ‘shall pay’ insurers the full amount due under the statutory formula.”
Land of Lincoln says the dispute is also about an agreement the United States made with the ACA exchange plan issuers.
“Even if the appropriations riders could be interpreted as extinguishing the government’s payment obligation retroactively, they would represent a breach of contract for which the government is liable,” the company says.
The ACA Risk Corridors Program
From 2008 through 2010, Democrats were in control of both the House and the Senate.
They developed the ACA public exchange program, in an effort to give consumers an easy way to shop for subsidized, standardized health coverage. They based many of the ACA exchange program rules and features on the rules and features for the popular Medicare Part D prescription drug plan program.
The Medicare Part D drug plan program has used a “risk corridors” program to make insurers comfortable with participating in the program.
Issuers with exceptionally high operating profits are supposed to send some of the extra cash to program managers.
Program managers are supposed to use that cash, and cash from the federal government, to help issuers with claims costs that exceed 105% of their Medicare drug plan premium revenue.