‘Obamacare’ back at Supreme Court, with billions for insurers on the line
WASHINGTON – More than $12 billion is at stake for the nation’s health insurers Tuesday when the Supreme Court hears another Affordable Care Act case.
For the federal government, the potential damages could be far greater, as its reputation as a reliable partner to private businesses is on the line.
Unlike earlier Obamacare cases before the high court – where the entire 2010 law and health coverage for millions of Americans was at risk – the latest case has largely flown under consumers’ radar.
The case revolves around a temporary “Obamacare” provision – called the “risk-corridor” program – that was designed to help health plans recover some losses in the first three years of the health law marketplaces.
The Republican-controlled Congress in late 2014 stripped most of the money out of the program in a budget bill signed by President Barack Obama. This occurred a year after insurers began selling policies to millions of Americans with the expectation that the safeguard would back them up.
Republicans led by Sen. Marco Rubio, R-fla., who were determined to repeal the ACA, called the original provision an insurer “slush fund.” But researchers later found that the loss of the riskcorridor program was largely responsible for soaring premiums in 2016 and 2017, and contributed to several startup insurers going out of business.
Dozens of insurers have cried foul and sued the government. Lower courts were split on whether the government should be forced to make the payments.
Here are some reasons you should pay attention to the case:
– The integrity of the federal government is at stake.
Health insurers say the government’s decision on the risk-corridor program amounts to a bait-andswitch. The health plans took a chance with the new marketplaces, where they had little knowledge of how sick or expensive new enrollees would be. They said they expected the risk-corridor funding would back them up.
The latest data shows the government owes insurers more than $12 billion in payments to cover losses on the insurance exchanges between 2014 and 2016.
“This case warrants comparison to Lucy Van Pelt pulling the football away from Charlie Brown – with our nation’s government cast as the capricious bully,” the Association for Community Affiliated Plans, an industry group representing nonprofit health plans, wrote in an amicus brief to the Supreme Court. “If the Federal Circuit’s rule stands, then from now on no business can trust a statutory promise of payment from the government.”
– Obamacare consumers may benefit if the court sides with the insurers.
The Supreme Court case combined suits from four insurers: Moda Health Plan of Oregon, Maine Community Health Options, Blue Cross Blue Shield of North Carolina and Land of Lincoln Mutual Health Insurance, a now-defunct health plan from Illinois. But dozens of other insurers also have filed lawsuits. If the court rules in favor of insurers, it could force the federal government to pay them $12 billion.
Experts say that could have a marginal effect on those insurers in setting future premiums. It could also force some plans to make rebate payments to customers based on another ACA provision that plans pay money back to members if they spend more than 20% of their premium dollars on administration, marketing and profits.
Meg Murray, CEO of the Association for Community Affiliated Plans, said the government owes $627 million to about 20 of her organization’s plans. “The money would help them going forward in paying back debts or investing their plans or reducing premiums,” she said.