U.S. Supreme Court

Supreme Court to consider cases accusing US of shorting health insurers $12B in promised payments

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The U.S. Supreme Court agreed Monday to decide whether Congress must fulfill a statutory promise to pay insurers who lost money by participating in the Affordable Care Act’s insurance marketplaces.

The court accepted and consolidated three cases brought by insurers who say they upheld their end of the bargain, and Congress must honor the statutory commitment to offset their losses.

The insurers say Congress promised to pay the money for three years to encourage insurers to participate in insurance marketplaces but later used appropriations riders to deny funds to pay the insurers. “The net effect was a bait-and-switch of staggering dimensions in which the government has paid insurers $12 billion less than what was promised,” says a cert petition filed by two insurers, Moda Health Plan and Blue Cross and Blue Shield of North Carolina.

The two other cert petitions (here and here) also used the bait-and-switch language.

The Affordable Care Act had authorized the payments as part of a “risk corridors” program intended to limit insurers’ gains and losses when they participated in the insurance marketplaces, report the Wall Street Journal, the New York Times, Politico and the Washington Post.

Under the program, insurers whose premiums exceeded expenses in the first three years of the program would have to pay some of the profit to the federal government. Insurers whose claims exceeded premiums charged would get partial payment for their losses.

The cases are Maine Community Health Options v. United States, Moda Health Plan v. United States and Land of Lincoln Mutual Health Insurance Co. v. United States.

The SCOTUSblog case pages are here, here and here.

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