Health Insurers Score Big Payday at Supreme Court

They're entitled to collect $12B from government in ObamaCare losses
By Newser Editors and Wire Services
Posted Apr 27, 2020 12:20 PM CDT
Supreme Court Gives Insurers a Big Payday
The website of the Affordable Care Act, in a file photo.   (AP Photo/Eric Gay, File)

The Supreme Court ruled Monday that insurance companies can collect $12 billion from the federal government to cover their losses in the early years of the health care law championed by President Obama, per the AP. Insurers are entitled to the money under a provision of ObamaCare that promised the companies a financial cushion for losses they might incur by selling coverage to people in the marketplaces created by the health care law, the justices said by an 8-1 vote. Congress inserted a provision in the Health and Human Services Department’s spending bills from 2015 to 2017 to limit payments under the “risk corridors” program, and both the Obama and Trump administrations argued that the provision means the government has no obligation to pay.

But Justice Sonia Sotomayor said in her opinion for the court that the congressional action was not sufficient to repeal the government's commitment to pay. “These holdings reflect a principle as old as the Nation itself: The Government should honor its obligations," Sotomayor wrote. In dissent, Justice Samuel Alito wrote that the court’s decision “has the effect of providing a massive bailout for insurance companies that took a calculated risk and lost. These companies chose to participate in an Affordable Care Act program that they thought would be profitable." The companies, which sold insurance in Alaska, Illinois, Maine, North Carolina, Oregon, and Washington, cite HHS statistics to claim they are owed $12 billion. (The case is separate from a challenge to the health care law that the court has agreed to hear in its term that begins in October.)

(Read more US Supreme Court stories.)

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