Update: 4:12 p.m. EDT
Mark Rust, who represented Land of Lincoln, hailed the ruling.
"Today
the court has made it possible to trust in government promises, even if
they are broken in the midst of discord and dysfunction," Rust said in
an email to IBTimes. "Even though the delay in appropriations cost Land
of Lincoln its business, at least the people of the state of Illinois
are going to be made whole by the aggressive actions here of its
liquidator. It should help all of us trust in the letter of the law
again."
Original story
The U.S. Supreme
Court on Monday ruled the federal government owes health insurance
companies billions of dollars for reneging on promises to shield
companies from losses under the Affordable Care Act. The insurers
accused the government of “bait and switch” and claim losses of more
than $12 billion.
The decision opens the way for insurers to sue the government in the Court of Federal Claims.
The
suit combined complaints filed by four companies: Moda Health Plan,
Blue Cross and Blue Shield of North Carolina, Land of Lincoln Mutual
Health Insurance Co. and Maine Community Health Options.
Health plans wracked up losses almost immediately after the health
insurance marketplaces opened in 2014. A temporary fund – the risk
corridor program – was set up to help cover sicker customers and serve
as an incentive for insurers to participate in the exchanges and keep
premiums at a reasonable level.
Those who crafted the law had hoped those companies that made money
on the exchanges would fund the now-expired program to reimburse
companies that suffered losses. In a 2015 overhaul, Republican lawmakers
barred the Department of Health and Human Services from providing the
funds.
The high court, in an 8-1 decision, said the action did not release the government from its obligation.
“Contrary
to the government’s contention, neither the appropriations clause nor
the Anti-Deficiency Act addresses whether Congress itself can create or
incur an obligation directly by statute,” the opinion said. “Nor does
[the law’s] obligation-creating language turn on whether Congress
expressly provided budget authority before appropriating funds. The
government’s arguments also conflict with well-settled principles of
statutory interpretation. … Congress did not impliedly repeal the
obligation through its appropriations riders.”
In the majority opinion, Justice Sonia Sotomayor said: “The
government should honor its obligations,” adding that’s a principle as
old as the nation itself. Despite GOP arguments to the contrary, the
program was not set up to be budget neutral.
In his dissent, Justice Samuel Alito said the ruling amounted to a bailout for the insurance industry.
"Under
the court’s decision, billions of taxpayer dollars will be turned over
to insurance companies that bet unsuccessfully on the success of the
program in question," Alito wrote.
The ruling is yet another loss
for the Trump administration, which has been trying to dismantle
Obamacare from the get-go. The ruling itself has no impact on the ACA.
The administration, however, is backing another suit filed by Republican-led states
that would overturn the entire law.
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