SCOTUS decided 8-1 in favor of health insurance companies and coops in MAINE COMMUNITY HEALTH OPTIONS v. UNITED STATES decision, April 27, 2020 to be paid.
I have been following this issue since 2015 and SCOTUS finally ruled on Republican’s (Sessions, Upton, Kingston) blockage of the Risk Corridor Program funding. A bit of history to explain how we got to this point.
Letter to the editor at Modern Healthcare Alert (2019):
“If you are going to report on this particular incident within the Cromnibus Act which passed December 11, 2014, why not give the complete history of how the Risk Corridor Program was stymied?
Initially, then Budget Committee Republican Ranking Member Senator Sessions sent a letter to the GAO asking whether the Risk Corridor payments were being appropriated correctly. In a letter back to Sessions the GAO said Agencies can only appropriate funds at the “discretion of Congress.” Funding had not been properly secured for the Risk Corridor Program. This effectively stopped any new funding from being used for the Risk Corridor Program; however, funding could be transferred from other healthcare programs according to the GAO.
With the aid of House Energy and Commerce Chair Fred Upton and House Appropriations Chair Jack Kingston, Section 227 was inserted into the Cromnibus Act.
“Page 892, Section 227: None of the funds made available by this Act from the Federal Hospital Insurance Trust Fund or the Federal Supplemental Medical Insurance Trust Fund, or transferred from other accounts funded by this Act to the ‘‘Centers for Medicare and Medicaid Services—Program Management’’ account, may be used for payments under section 1342(b)(1) of Public Law 111–148 (relating to risk corridors).”
End of comment.
Comment on Health Affairs Blog (2020)
“Interesting, not one word on what precipitated this. The administration (Obama) can not appropriate monies that are not designated in a bill. There was no funding for the Risk Corridor program appropriated by Congress. Shortly after the bill was passed, the Democrats lost control of the House of Representatives.
It was Senator Jeff Sessions who wrote the letter to the GAO asking whether the Obama Administration could appropriate money to fund the Risk Corridor Program. In a letter back to Senator Sessions, the GAO said it was only by Congressional authority could funds be appropriated. The GAO added that other appropriated funding could be used to fund the Risk Corridor Program.
It was Michigan Congressional Representative Fred Upton in conjunction with Colorado Congressional Representative Jack Kingston who together initiated Section 227 to be inserted in the Consolidated Appropriations Act, 2014 (H.R. 3547), nicknamed the Cromnibus (an omnibus spending bill that packaged several appropriation bills together in one larger bill) bill shortly before the bill was passed.
Page 892, Section 227: None of the funds made available by this Act from the Federal Hospital Insurance Trust Fund or the Federal Supplemental Medical Insurance Trust Fund, or transferred from other accounts funded by this Act to the ‘‘Centers for Medicare and Medicaid Services—Program Management’’ account, may be used for payments under section 1342(b)(1) of Public Law 111–148 (relating to risk corridors).
This was not a mistake and was done with malice towards constituents (who had purchased healthcare insurance) to curry their anger and to also strike a purposeful blow against President Obama by Republican leadership who vowed even before day one to block every effort of his. It was personal.
The end effect of Section 227 was; Coops going bankrupt, insurance companies withdrawing from the exchanges leaving some areas with one healthcare provider, constituents losing insurance as policies were canceled, and premiums to increase. The original intent of the ACA Risk Corridor program was to cover losses from acquiring too many risky people during any one year up to a three years adjustment period. At the end of the 3 year period healthcare insurance companies and Coops were expected to have balanced losses and with profits. The ACA Risk Corridor Program was similar to the Republican Part D Risk Corridor Program which is a continuous year after year program.
That no-mention of the Republican’s political treachery against constituents due to a Black President (edited for a better explanation) being elected to office is mentioned baffles me as it still continues by Trump in a more blatant and concentrated effort.
End of comment.
Been writing on the sabotage by Republicans of the Risk Corridor program since 2015. In the last week, a purposeful Republican wrong was righted by SCOTUS voting 8 to 1 (with Alito in the nay) MAINE COMMUNITY HEALTH OPTIONS v. UNITED STATES favoring healthcare insurance companies and Coops (those still in existence) with the funds ($12 billion) they were to have been awarded since 2014. The funds will be awarded to various companies as decided by lower courts.
Originally, the Risk Corridor Program was scored as a money maker by the CBO and was to exist for only 3 years until insurance companies and Coops sorted out their customers according to cost. Those who lost money beyond 3% were awarded funds and those who had profits greater than 3% kicked in to the fund (neat little chart here: Risk Corridor, Healthcare Premiums, Companies Leaving the Exchanges, and Republicans).
Salon has an article up on “Marco Rubio’s final humiliation: Supreme Court stops GOP’s seven-year campaign against Obamacare” blaming the bambino, Little Mario for all the trouble. No, he might have taken credit for it but it was Sessions who wrote the letter to the GAO which came back stating the administration can not appropriate funds but, but the administration can transfer funds already approved to the Risk Corridor Program. It was Congressional Representatives Fred Upton (MI) and Jack Kingston (CO) who inserted Section 227 (see above) into the Cromnibus Appropriations bill for 2015.
Mario taking credit for this was just a boast. It was Sessions, Upton, and Kingston’s actions which killed this program (I will be following up with Fred Upton on this also). I consider his actions to be political treachery without regard for Michigan constituents and unbecoming of a Congressional Representative. Fred Upton’s action were done deliberately and were meant to cause harm to Michigan constituents as well as others nationally.
So what happens now? The remaining insurance companies and Coops collect their funds, the rest goes into the Treasury, and the constituents are still stuck with higher premiums.