Supreme Court Sides With Insurers In $12B Case Over Promised Risk-Corridor Funds Under ACA

Politico: Supreme Court Rules Government Must Pay Billions To Obamacare Insurers
The Supreme Court on Monday ruled the federal government owes health insurers massive payments from an Obamacare program shielding them from financial risks after the companies accused Washington of reneging on its funding promises. The 8-1 decision could open the floodgates for federal cash to the insurance industry. Insurers who accused the government of a “bait and switch” claimed they’re owed $12 billion from the Affordable Care Act program. (Luthi, 4/27)

The New York Times: Supreme Court Rules For Insurers In $12 Billion Obamacare Case
Justice Sonia Sotomayor, writing for the majority in the 8-to-1 ruling, said the court’s decision vindicated “a principle as old as the nation itself: The government should honor its obligations.” The health care law had promised the insurers that they would be protected, she wrote, and it did not matter that Congress later failed to appropriate money to cover the insurers’ shortfalls. The Affordable Care Act established so-called risk corridors meant to help insurance companies cope with the risks they took when they decided to participate in the law’s marketplaces without knowing who would sign up for coverage. (Liptak, 4/27)

NPR: Supreme Court Says U.S. Must Pay Obamacare Insurers $12B
The law, as enacted, promised to limit profits and losses for insurance companies in the first three years of the Obamacare program. Some companies made more money than allowed by the formula, and had to pay some back to the government, and other companies lost money and were owed money by the government under the formula. But in 2014, the first year that the ACA's plan was in place, the Republican-controlled Congress reneged on the promise to appropriate money for the companies that had lost money. It did the same for the next two years as well, adding to appropriation bills a rider that barred the government from fulfilling the promise in the statute. After President Trump was elected, his administration supported the GOP-led refusal to pay. (Totenberg, 4/27)

USA Today: Affordable Care Act: Supreme Court Rules For Health Insurers
Because insurers took considerable risks when they agreed to participate in Obamacare's marketplaces, the original 2010 law included limits on the amount of losses they could incur. But when the bill came due to cover some of those losses several years later, the government refused to pay. (Wolf, 4/27)

The Wall Street Journal: Supreme Court Rules Government Must Pay Insurers Under Affordable Care Act Program
The decision clears insurers to seek roughly $12 billion under the program. Early on, Obama administration officials believed the now-expired program could remain budget-neutral by balancing insurance company profits and losses during the first few years of the exchanges, from 2014 to 2016. But those hopes missed the mark, especially after changes in implementing regulations initially altered the pool of consumers seeking insurance coverage. Fewer healthy people participated in the exchanges than anticipated, leading to larger financial losses than many insurers expected. (Kendall, 4/27)

Modern Healthcare: Supreme Court Rules Insurers Owed $12 Billion In ACA Funds
The Supreme Court concluded that the insurers can sue the federal government to collect unpaid risk-corridor funds in the U.S. Court of Federal Claims. Justice Samuel Alito was the lone dissenter. He argued that federal law did not give insurers the right to sue for damages if they were to recover payments. "Under the court's decision, billions of taxpayer dollars will be turned over to insurance companies that bet unsuccessfully on the success of the program in question. This money will have to be paid even though Congress has pointedly declined to appropriate money for that purpose," Alito wrote. (Livingston, 4/27)