GAO ruling faults administration in health law dispute

WASHINGTON — The Obama administration failed to follow the president’s health care law in a $5 billion dispute over compensating insurers for high costs from seriously ill patients, Congress’ investigative arm said Thursday.

T h e o p i n i o n f r o m t h e Government Accountability Office is a setback for the White House and bolsters Republican complaints that administration officials bent the law as problems arose carrying out its complex provisions. The finding may complicate efforts to stabilize premiums in the law’s insurance marketplaces, where about 11 million people get coverage.

The Obama administration said it “strongly disagrees” with the GAO’s conclusion.

At issue is how the administration has handled a little-known, but important program called “transitional reinsurance.” Working in the background of the law’s coverage expansion, the threeyear program collects fees from employer and other private health insurance plans and channels the money to health plans that face large claims for treating patients with catastrophic medical problems.

The law specified that the fee would collect $25 billion from 2014-2016, and $5 billion of that would go directly to the Treasury. But when fee collections fell short, the Health and Human Services Department failed to allocate a share of the money to the Treasury, saying it would do so later as more money came in.

Republicans cried foul and asked the GAO to examine the issue. On Thursday, Republicans got the ruling they had hoped for.

“HHS lacks authority to ignore the statute’s directive to deposit amounts (collected under the program) in the Treasury,” the GAO’s general counsel, Susan A. Poling, wrote.

Republicans accuse the Obama administration of shortchanging the Treasury to “bail out” the health care law.

“T h e a d m i n i s t r a t i o n s h o u l d e n d t h i s i l l e g a l scheme immediately, and focus on providing relief from the burdens of this law,” Sen. John Barrasso, R-Wyo., said in a statement.

Previously, Republicans have complained that the administration flouted the law when it delayed a requirement that larger employers must offer coverage to their workers.

Responding to Thursday’s GAO opinion, the Obama administration said the prog r a m wa s i mpl e men t e d “lawfully and in a transparent manner” and “helps to reduce premiums for consumers.”

The GAO has no enforcement power over its ruling, but congressional opponents of the health law could use the finding to write legislation that forces HHS to pay the Treasury.

Generally, lawmakers of bot h par t i e s re s pec t t he GAO’s rulings on federal budget issues.

The reinsurance program is one of three financial backstops created by President Barack Obama’s law to support insurers as they built their customer base in the new markets for subsidized private insurance.