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,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while the ACA required the government to compensate the insurers for their losses, the appropriations measures repealed or suspended that requirement.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.