The Epoch Times The federal government must fork over more than $12 billion to insurance companies that lost money by participating in the Affordable Care Act’s “risk corridors” program, the Supreme Court has ruled.
The decision rebuffs the Trump administration and Republican lawmakers such as Sen. Marco Rubio, a Florida Republican, who has characterized taxpayer funding to cover the shortfall as a bailout for the insurance industry. That’s because the “risk corridors” program gave participating insurers a special deal that limited their financial exposure for three years, starting in 2014.
The program was designed to stabilize health care insurance premiums and subsidize insurers willing to sell a risky new product—in this case, comprehensive, guaranteed issue, individual and small-group insurance covering preexisting conditions.
The understanding was that if premiums collected on Obamacare’s health care marketplaces from 2014 through 2016 exceeded an insurer’s medical expenses, the company would kick back some of its profit to the government. Conversely, if premiums failed to cover expenses, the insurer would receive payments from the government.
But as part of a backlash against Obamacare, Congress added language to appropriations bills in an effort to stop the government from making payments. The money paid into the pool quickly dried up, and Congress declined to make up the difference, so the insurers went to the U.S. Court of Federal Claims. Their claims were later rejected by a three-judge panel of the U.S. Court of Appeals for the Federal Circuit.
