The federal government owes health insurer Molina $52 million for payments it was supposed to receive involving losses under Obamacare, the U.S. Court of Federal Claims ruled Friday.
The payments, called "risk corridors," were diminished as part of a spending bill advanced by Republicans, who referred to them as a "bailout" for the insurance industry. Withholding them contributed to losses for insurers and to the shutdown of nonprofit insurance co-ops created under the law.
Republicans argued the funds needed an appropriation by Congress and that riders attached to 2015 and 2016 appropriations bills banned such payments. The court rejected those arguments in its ruling.
"The government is liable for its breach of a statutory and contractual obligation to make full annual payments to insurers who participated in the risk corridor program," according to the opinion.
The risk corridor program, established under Obamacare, pays insurers for losses they incur during the first three years after participating in the exchanges. They were intended to help insurers that ended up with too many sick enrollees and an unbalanced risk pool.
Molina incurred losses from 2014 to 2015 but did not receive payments from the federal government.