Notice & Comment

NEJM: Does the U.S. owe billions to insurers?

Although it’s been eclipsed by the presidential election, the fight over the risk corridor lawsuits continues to simmer. Last Friday, the House of Representatives moved to file an amicus brief objecting to the administration’s willingness to open settlement negotiations:

The law is clear that insurance companies operating on the health exchanges established pursuant to the [ACA] have no right to government handouts in excess of incoming funds under the Act’s risk corridors program. This is because the program was intended to be budget-neutral and self-funding—i.e., outgoing payments would be covered by incoming payments—and Congress has confirmed this intent, not once but twice, through annual appropriations legislation.

I think the House is mistaken, and the New England Journal of Medicine has just published a piece of mine describing why:

As the Government Accountability Office has explained, “the mere failure to appropriate sufficient funds is not enough” to change the scope of an entitlement. And that’s all the appropriations statutes are: “mere failure[s] to appropriate sufficient funds.” They do not purport to change what health plans are entitled to. So the promise that the ACA made has not been undone.

[In addition], congressional Republicans maintain that the administration cannot settle the cases because Congress hasn’t appropriated the money to pay court judgments. Without an appropriation, they argue, the United States can’t make a payment even if a court orders that the money be paid. In other words, Congress is always free to refuse to honor its debts—and it has refused to honor these particular debts.

The Republicans acknowledge that an existing, permanent appropriation known as the Judgment Fund normally allows the executive branch to settle lawsuits against the United States. By its terms, however, the Judgment Fund is available only when payment is “not otherwise provided for.” Drawing support from a memo compiled by the Congressional Research Service, they believe that they “otherwise provided for” risk-corridor payments when they partially funded the program.

But in fact the Judgment Fund is not unavailable whenever Congress chooses to partially fund a program. It is unavailable only when Congress has designated an alternative source of funds to pay money judgments arising from a failure to fulfill the United States’ financial obligations. Because Congress has made no such designation here, the Judgment Fund appears to be available to settle the risk-corridor lawsuits.

Go read the whole thing! (For more extensive coverage, see here.)


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