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 The justices will hear an appeal by a group of insurers of a lower
court's ruling that Congress had suspended the government's
obligation to make such payments. The insurers have said that
ruling, if allowed to stand, would let the government pull a
"bait-and-switch" and withhold money the companies were promised.
Moda Inc unit Moda Health Plan Inc and other insurers that sued to
try to compel the Department of Health and Human Services (HHS) to
make the payments have said the government was supposed to help them
recover from early losses they suffered after the 2010 passage of
the Affordable Care Act under Democratic former President Barack
Obama.
The law, dubbed Obamacare, has enabled millions of Americans who
previously had not medical coverage to obtain insurance.
Other insurers involved in the case include Blue Cross and Blue
Shield of North Carolina, Maine Community Health Options and Land of
Lincoln Mutual Health Insurance Company.
If the Supreme Court sides with the insurers, it could result in a
significant one-time cash infusion for major companies such as
Humana Inc, Anthem Inc and Centene Corp, according to a note by
Evercore ISI. The insurers had previously written off the value of
the payments.
Payments would have come through the law's so-called risk corridor
program that was designed to mitigate insurers' risks from 2014 to
2016 when they sold coverage to previously uninsured people who
bought insurance on exchanges established under the Affordable Care
Act.
Robert Gootee, chief executive of Moda Inc, said he was encouraged
that the Supreme Court agreed to hear the case.
"We remain confident that the court will ultimately hold the
government to its promise to pay those companies, including Moda,
who answered the government's call to provide access to affordable
health care for the neediest of Americans," Gootee said in a
statement.
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HHS declined to comment.
Under the risk corridor program, insurers that paid out
significantly less in claims on policies sold through the exchanges
than they took in from premiums provided some of their gains to the
government. Insurers that paid out more were entitled to government
compensation for part of their losses.
Republicans, who have opposed Obamacare from the outset and sought
numerous times to repeal it in Congress, have called the
risk-corridor program a "bailout" for the insurance industry.
In December 2014, Congress passed an appropriations bill for the
2015 fiscal year that included a rider barring HHS from using
general funds to pay the government's risk corridor obligations.
As a result, the government could compensate insurers only with the
money it collected from insurance companies that paid less than they
took in from premiums. Congress enacted identical riders for fiscal
years 2016 and 2017.
Payments from insurers, though, could not fund all of the claimed
risk corridor payments. In November 2017, HHS published statistics
indicating that payments from insurers for the three-year period
fell short of claimed payments by $12 billion.
The U.S. Court of Appeals for the Federal Circuit ruled 2-1 last
year that Congress, in passing the appropriations riders, implicitly
repealed its statutory obligation to pay the insurers. The insurers
appealed, arguing that Supreme Court precedents require much more
explicit legislative language to eliminate a previously adopted
payment obligation.
For a graphic on major Supreme Court rulings, click https://tmsnrt.rs/2V2T0Uf
(Reporting by Nate Raymond and Lawrence Hurley; Editing by Will
Dunham)
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