by Paige Minemyer | Jun 24, 2019 10:46am
The
Supreme Court has agreed to hear three cases filed by insurers against the
federal government over more than $12 billion in Affordable Care Act (ACA) risk
corridor payments.
The
court granted (PDF)
petitions for writ of certiorari in the three lawsuits on Monday,
allowing Moda Health Plan, Maine Community Health Options and Land of
Lincoln Mutual Health the opportunity to appeal a federal appeals court ruling
that rejected their request for the payments.
The
three lawsuits will be consolidated before the Supreme Court, according to
Monday’s order.
The
risk corridors were established by the ACA to protect payers from
incurring massive gains or losses when establishing health plans on the law’s
insurance exchanges. The program would redistribute payments to
insurers that were thriving on the markets to those who were struggling.
A Republican-controlled
Congress, however, capped the payments in 2014,
likening the program to a “bailout” of insurers. This
change played a role in the sky-high premiums in some regions on the exchanges
and was a factor in some insurers’ decisions to exit the marketplaces
altogether.
A
number of insurers also responded by suing the government to recover the
payments, to varying success. A federal district court ruled in
favor of Moda Health in 2017, but the appeals court overturned that ruling a year
ago.
The
Department of Justice submitted a brief to the Supreme
Court on the matter last month, asking it to dismiss the
cases. It argued that congressional action superseded its authority to make the
risk corridor payments—an opinion shared by the appeals court.
They
also argued that it’s unlikely insurers got into the exchanges solely because
of the risk corridor program, but instead because they saw a potential business
avenue.
In
a response brief (PDF), Moda Health
likened the promise of the risk corridors to a “bait-and-switch.”
“The
government acknowledges that providing unprecedented insurance on the new
exchanges was a risky enterprise, and that risk corridor payments were designed
to induce insurers to provide coverage despite those risks,” the insurer wrote.
“But in the government’s view, the real risk was relying on the government to
keep its word.”
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