House lawmakers have charged the Obama administration with circumventing the law to bail out health insurers.
The House issued a friend of the court brief on Friday over a lawsuit from an Oregon insurer seeking promised Obamacare payments. The House believes that the administration will use the lawsuits as a way to bail out failing insurers through the court system since Congress will not allow such payments.
"HHS is trying to force the U.S. Treasury to disburse billions of taxpayer funds to insurance companies even though [the Justice Department] has convincingly demonstrated that HHS has no legal obligation and no right to pay these sums," the brief said.
The lawsuit from Health Republic Insurance is one of several to focus on Obamacare's risk corridor program, which was meant to help insurers cover high financial losses.
Insurers with high profits would pay into the program, which would in turn pay out insurers with major losses. The idea was to help insurers adjust to Obamacare as nobody knew who would enroll in the marketplace when it went online in 2014.
However, a provision in an omnibus spending bill required that the program be revenue-neutral. This meant it could pay out only the money it got from insurers and not use any federal funds to make up the difference.
As a result, insurers requested nearly $3 billion in payments but received only 12 percent of that.
The administration did not immediately return a request for comment on the brief.
The dearth of risk corridor payments was the reason some cash-strapped taxpayer-funded co-ops decided to shut down in fall 2015. Only six of 23 co-ops remain.
Health Republic and some co-ops including Evergreen in Maryland sued the federal government to get the money that they said is owed to them.
But Republicans believe that the lawsuit will be an end run around the intent of Congress.
The House called on the court to dismiss Health Republic's claims.
"The House strongly disagrees with this scheme to subvert Congressional intent by engineering a massive giveaway of taxpayer money," the brief added.