On Tuesday, the United States Supreme Court heard a lawsuit pertaining to unpaid risk corridor payments ranging from 2014 to 2016. Risk corridor payments are a component of the Affordable Care Act that limits the risk from qualified health plans on the insurance marketplaces that work to minimize year-end losses of insurers who cover older, sick customers. The lawsuit heard this week is a combination of three cases brought to the Supreme Court by four insurers.
The four insurers behind this case are Maine Community Health Options v. United States, is Maine Community Health Options, Moda Health Plan, Blue Cross and Blue Shield of North Carolina and Land of Lincoln Mutual Health Insurance Company, who argue that the government enforced these payments through the Affordable Care Act and had failed to follow through on these payments to insurers, resulting in a major bait and switch situation. By not acting on the promise of making these payments, the government is not seen as a reliable business partner for these insurers, risking these insurers’ profitability and growth.
On the U.S. government’s side of the case, the government pushed that these insurers had assumed the risk when deciding to participate in the Affordable Care Act and had accepted all the terms and consequences from participating. Furthermore, the government stated that risk corridor funds cannot be paid to insurers without appropriation from Congress. The government is stating that they are not explicitly required to make these payments under the Affordable Care Act because there was no explicit appropriation to make such payments; they are also saying that Section 1342 of the Affordable Care Act does not require a statutory promise or duty.
Although fully hearing both sides of the argument, the Justices of the Supreme Court seem to appeal more to insurers, as they seem concerned over the government’s position that Congress rarely enacts a money-mandating statue in the absence of an explicit appropriation. A decision on this case is expected by Summer 2020.
Read the original article from Health Affairs here.