Conservative lawmakers weigh in on insurer's risk corridor lawsuit

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Conservative lawmakers have stepped up their fight against insurers that are suing to recoup payments from the federal risk corridor program.

On Friday, House Republicans filed a brief arguing that plaintiff in one such lawsuit against the U.S. government has no right to risk corridor payments “in excess of receipts.” 

Specifically at issue is the now-defunct consumer operated and oriented plan, Health Republic Insurance of Oregon, which filed a lawsuit in February that claims it's owed $5 billion from the risk corridor program. Because collections fell short, the risk corridor program paid out approximately 12.6 percent of what it owed payers for the 2014 benefit year.

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The Centers for Medicare & Medicaid Services previously indicated it is willing to consider settling with insurers that have sued to recoup payments. But it has also filed motions to dismiss cases brought by Moda Health and Blue Cross Blue Shield of North Carolina, arguing it has no obligation to pay insurers beyond what it takes in collections.

In late September, House leaders penned a letter to the Obama administration warning against the appropriation of the Judgement Fund--a permanent appropriations coffer established by the Treasury Department for awards against the U.S.government--to settle insurer lawsuits.

House Republicans' brief in the Health Republic case makes similar arguments about why payers should not recover money from the Judgement Fund:

  • The brief cites the Government Accountability Office’s response to lawmakers that the language of the Affordable Care Act isn’t strong enough to justify an appropriation.
  • The Department of Health and Human Services has been inconsistent, it says. In 2014, HHS said it would implement the risk corridor program in a budget neutral way. But then it also said it would use other sources of funding to cover the risk of shortfalls in risk corridor receipts, “subject to the availability of the appropriations,” according to the brief. 

While they are not directly involved in the insurers' lawsuits, conservative lawmakers want to ensure the interests of the U.S. government are “fully represented,” according to the brief.

Meanwhile, more than 50 conservative groups led by Freedom Partners sent a letter to Congress last week arguing against “bailouts” to insurers in the form of two of the ACA’s temporary premium stabilization programs: Reinsurance and the risk corridor program.

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