Insurers urge SCOTUS to take a look at appeals court ruling on ACA cost-sharing reduction payments

Supreme Court
Insurers are asking the Supreme Court on cost-sharing reduction payments. (Getty/BrianPIrwin)

Two insurers are urging the Supreme Court to review a lower court decision that they say could prevent many plans from receiving the full amount in owed cost-sharing reduction payments.

In a filing with the court (PDF) this week, Maine Community Health Options and Community Health Choice argue that the decision allows the government to avoid paying out its full obligation in CSR payments under the Affordable Care Act. 

In the August 2020 ruling, the Court of Appeals for the Federal Circuit says that the Supreme Court's ruling that mandated the government pay back-owed risk corridor payments meant CSR payments were also mandatory.

However, the court said that plans that engaged in a practice known as "silver-loading" to mitigate the lost CSR payments should not be entitled to receive such payments in full. Following the Trump administration's decision to cancel cost-sharing reduction payments in 2017, many insurers raised premiums on their benchmark silver plans, raising subsidies on its plans in tandem.

RELATED: SCOTUS sides with insurers in battle over risk corridor payments

The insurers counter, however, that the Supreme Court decision on risk corridors sets a precedent that all of the back payments are owed regardless of how payers adjusted to deal with the decision to cut them off.

"The decision contradicts the simple principle that this Court set forth in Maine Community: When the government violates a clear statutory shall-pay obligation, the party who performed in full is entitled to a statutory shall-pay remedy," they wrote in the filing.

The insurers petitioned the appeals court for a hearing on the issue in November but were denied.

Both cost-sharing reduction payments and the risk corridor program were efforts to incentivize health plans to participate on the nascent ACA exchanges. CSR subsidies help low-income Americans pay for coverage, while the risk corridors provide a boost to health plans that aren't performing strongly on the exchanges.