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U.S. Supreme Court Justices heard oral arguments Dec. 10 in a case that centers on whether the federal government owes insurers billions based on an Affordable Care Act provision intended to help health plans mitigate risk under the law.
Maine Community Health Options v. United States, which consolidates several lawsuits against the government, involves the ACA’s risk corridor program, which required the U.S. Department of Health & Human Services to collect funds from profitable insurers that offered qualified health plans under the exchanges and distribute the funds to insurers with excessive losses.
Collections from profitable insurers under the program fell short in 2014, 2015, and 2016, while losses steadily grew, resulting in the HHS paying about 12 cents on the dollar in payments to insurers. More than 150 insurers now allege they were shortchanged and they want the Supreme Court to force the government to reimburse them $12 billion.
The U.S. Department of Justice counters that the government is not required to pay the plans because of appropriations measures passed by Congress in 2014 and later years that limited the funding available to compensate insurers for their losses. The federal government is not obligated to pay the insurers back for the losses and the suits should be dismissed, the DOJ attorneys argue.
The federal government and insurers have each experienced wins and losses at the lower court level. Most recently, the U.S. Court of Appeals for the Federal Circuit decided in favor of the government, ruling that while the ACA required the government to compensate the insurers for their losses, the appropriations measures repealed or suspended that requirement.
Insurers, economists, and state government led by both parties have weighed in on the case via court briefs.
The case could have important ramifications that have an impact on more than just insurers, said Timothy Jost, a health law expert and retired professor from Washington and Lee University in Lexington, Va.
“The insurers are left holding the bag, but a number of insurers went insolvent [due to the losses], so in those cases, the states are left holding the bag,” Mr. Jost said in an interview.
The outcome could influence future partnerships between the federal government and private entities, according to Katie Keith, an attorney and health law analyst who writes for the Health Affairs Blog. She noted that the U.S. Chamber of Commerce, which historically has not supported the ACA, sided with insurers in the case. In a court brief, attorneys for the chamber wrote that businesses make substantial financial investments to participate in federal programs, and their willingness to do so is based on having assurance that the government will honor its statutory commitments. If left uncorrected, the circuit’s decision “will have far-reaching consequences for myriad areas in which U.S. businesses partner with the federal government to provide vital goods and services,” chamber attorneys wrote.
“This is about more than the ACA. It’s about the fundamentals of public/private partnerships,” Ms. Keith said in an interview. “If you’re contracting with the government, can the government just break those promises or break those obligations after the fact? Folks at the chamber are making it about bigger, broader issues about what it means when the government partners with private organizations.”
Mr. Jost said it’s hard to say which way the Supreme Court will rule, but the fact that the court is reviewing the case speaks volumes.
“Its kind of hard to believe they’re going to order the federal government to pay $12 billion,” he said. “On the other hand, they didn’t have to take the case.”
A Supreme Court decision is expected in early 2020.
U.S. Supreme Court Justices heard oral arguments Dec. 10 in a case that centers on whether the federal government owes insurers billions based on an Affordable Care Act provision intended to help health plans mitigate risk under the law.
Maine Community Health Options v. United States, which consolidates several lawsuits against the government, involves the ACA’s risk corridor program, which required the U.S. Department of Health & Human Services to collect funds from profitable insurers that offered qualified health plans under the exchanges and distribute the funds to insurers with excessive losses.
Collections from profitable insurers under the program fell short in 2014, 2015, and 2016, while losses steadily grew, resulting in the HHS paying about 12 cents on the dollar in payments to insurers. More than 150 insurers now allege they were shortchanged and they want the Supreme Court to force the government to reimburse them $12 billion.
The U.S. Department of Justice counters that the government is not required to pay the plans because of appropriations measures passed by Congress in 2014 and later years that limited the funding available to compensate insurers for their losses. The federal government is not obligated to pay the insurers back for the losses and the suits should be dismissed, the DOJ attorneys argue.
The federal government and insurers have each experienced wins and losses at the lower court level. Most recently, the U.S. Court of Appeals for the Federal Circuit decided in favor of the government, ruling that while the ACA required the government to compensate the insurers for their losses, the appropriations measures repealed or suspended that requirement.
Insurers, economists, and state government led by both parties have weighed in on the case via court briefs.
The case could have important ramifications that have an impact on more than just insurers, said Timothy Jost, a health law expert and retired professor from Washington and Lee University in Lexington, Va.
“The insurers are left holding the bag, but a number of insurers went insolvent [due to the losses], so in those cases, the states are left holding the bag,” Mr. Jost said in an interview.
The outcome could influence future partnerships between the federal government and private entities, according to Katie Keith, an attorney and health law analyst who writes for the Health Affairs Blog. She noted that the U.S. Chamber of Commerce, which historically has not supported the ACA, sided with insurers in the case. In a court brief, attorneys for the chamber wrote that businesses make substantial financial investments to participate in federal programs, and their willingness to do so is based on having assurance that the government will honor its statutory commitments. If left uncorrected, the circuit’s decision “will have far-reaching consequences for myriad areas in which U.S. businesses partner with the federal government to provide vital goods and services,” chamber attorneys wrote.
“This is about more than the ACA. It’s about the fundamentals of public/private partnerships,” Ms. Keith said in an interview. “If you’re contracting with the government, can the government just break those promises or break those obligations after the fact? Folks at the chamber are making it about bigger, broader issues about what it means when the government partners with private organizations.”
Mr. Jost said it’s hard to say which way the Supreme Court will rule, but the fact that the court is reviewing the case speaks volumes.
“Its kind of hard to believe they’re going to order the federal government to pay $12 billion,” he said. “On the other hand, they didn’t have to take the case.”
A Supreme Court decision is expected in early 2020.
U.S. Supreme Court Justices heard oral arguments Dec. 10 in a case that centers on whether the federal government owes insurers billions based on an Affordable Care Act provision intended to help health plans mitigate risk under the law.
Maine Community Health Options v. United States, which consolidates several lawsuits against the government, involves the ACA’s risk corridor program, which required the U.S. Department of Health & Human Services to collect funds from profitable insurers that offered qualified health plans under the exchanges and distribute the funds to insurers with excessive losses.
Collections from profitable insurers under the program fell short in 2014, 2015, and 2016, while losses steadily grew, resulting in the HHS paying about 12 cents on the dollar in payments to insurers. More than 150 insurers now allege they were shortchanged and they want the Supreme Court to force the government to reimburse them $12 billion.
The U.S. Department of Justice counters that the government is not required to pay the plans because of appropriations measures passed by Congress in 2014 and later years that limited the funding available to compensate insurers for their losses. The federal government is not obligated to pay the insurers back for the losses and the suits should be dismissed, the DOJ attorneys argue.
The federal government and insurers have each experienced wins and losses at the lower court level. Most recently, the U.S. Court of Appeals for the Federal Circuit decided in favor of the government, ruling that while the ACA required the government to compensate the insurers for their losses, the appropriations measures repealed or suspended that requirement.
Insurers, economists, and state government led by both parties have weighed in on the case via court briefs.
The case could have important ramifications that have an impact on more than just insurers, said Timothy Jost, a health law expert and retired professor from Washington and Lee University in Lexington, Va.
“The insurers are left holding the bag, but a number of insurers went insolvent [due to the losses], so in those cases, the states are left holding the bag,” Mr. Jost said in an interview.
The outcome could influence future partnerships between the federal government and private entities, according to Katie Keith, an attorney and health law analyst who writes for the Health Affairs Blog. She noted that the U.S. Chamber of Commerce, which historically has not supported the ACA, sided with insurers in the case. In a court brief, attorneys for the chamber wrote that businesses make substantial financial investments to participate in federal programs, and their willingness to do so is based on having assurance that the government will honor its statutory commitments. If left uncorrected, the circuit’s decision “will have far-reaching consequences for myriad areas in which U.S. businesses partner with the federal government to provide vital goods and services,” chamber attorneys wrote.
“This is about more than the ACA. It’s about the fundamentals of public/private partnerships,” Ms. Keith said in an interview. “If you’re contracting with the government, can the government just break those promises or break those obligations after the fact? Folks at the chamber are making it about bigger, broader issues about what it means when the government partners with private organizations.”
Mr. Jost said it’s hard to say which way the Supreme Court will rule, but the fact that the court is reviewing the case speaks volumes.
“Its kind of hard to believe they’re going to order the federal government to pay $12 billion,” he said. “On the other hand, they didn’t have to take the case.”
A Supreme Court decision is expected in early 2020.
