Amid ongoing concern that President Obama will bail out his insurance company allies who’ve lost money selling Obamacare, his own Justice Department has now effectively admitted that he has no legal authority to do so. In a brief filed in federal court, the Justice Department argues that the federal government doesn’t owe insurers any taxpayer money, because Obamacare didn’t promise them any: “[S]ection 1342 [the risk-corridors section of Obamacare] does not require HHS to make risk corridors payments in excess of collections.” This is an important development in the ongoing fight over Obamacare’s insurer bailout.
Just two weeks earlier, the Department of Health and Human Services (HHS) had implied that an out-of-court settlement for insurers was on the way. A release from the department read, “HHS recognizes that the Affordable Care Act requires the Secretary to make full payments to issuers. HHS will record risk corridors payments due as an obligation of the United States Government for which full payment is required.” HHS continued, in an apparent invitation to insurers, “[W]e are open to discussing resolution of those claims. We are willing to begin such discussions at any time.”
The Washington Post subsequently ran an above-the-fold headline declaring, “Payouts in works to shore up ACA.” Parroting its Obama administration sources, the Post claimed that the bailout money is merely what “the government owes” insurers and “what the insurers are owed,” and that the risk-corridor program “originally was not supposed to pay for itself,” until Republicans altered it. As I replied at the time, those claims are false.
Now the Justice Department seems to agree. Its 45-page brief argues that the government doesn’t owe any money; that insurers aren’t owed any money; and that the risk-corridor program was originally supposed to pay for itself, without the benefit of taxpayer money. (Some insurers would pay in; other insurers would take out.) Indeed, the disconnect between what HHS has argued and what Justice is now arguing is so pronounced that Juniper Research Group CEO Chris Jacobs wonders whether the Obama administration is at war with itself—specifically, whether its political appointees and its career civil servants are at war with each other.
The Justice Department’s legal brief states:
The Justice Department brief then proceeds to make several important points, including noting that Congress provided funding for other parts of Obamacare in the original 2,400 legislation, but not for the risk-corridor program:
The brief then draws attention to how the risk-corridor program’s expected revenue-neutrality—the expectation that it would not function as a bailout—influenced the Congressional Budget Office’s scoring, which was “critical” to securing Obamacare’s passage:
Finally, the brief says that Congress’s intentions—specifically its opposition to the program’s functioning as a bailout—are quite clear at this point:
In light of these statements by his own Justice Department, it would be very hard for Obama to turn around and implement a unilateral executive bailout of insurance companies. Obama, however, has done something similar before. Prior to decreeing that he would no longer deport illegal immigrants under 30 years of age—before subsequently decreeing that that roughly five million illegal immigrants who are parents of citizens are exempt from deportation and are even eligible for work permits—Obama said the following:
“With respect to the notion that I can just suspend deportations through executive order, that’s just not the case, because there are laws on the books….Congress passes the law. The executive branch’s job is to enforce and implement those laws….There are enough laws on the books by Congress that are very clear in terms of how we have to enforce our immigration system that for me to simply, through executive order, ignore those congressional mandates would not conform with my appropriate role as president.”
If Obama was willing to ignore his own legal and constitutional analysis in his determination to decree new federal immigration “law” from the White House, no one should put it past him to ignore the analysis of his own Justice Department in his quest to bail out his insurance company allies with money that Congress has never appropriated. Still, his Justice Department’s legal brief serves to highlight that any such actions by Obama would be in violation of our Constitution and laws.
Jeffrey H. Anderson, author of “An Alternative to Obamacare,” is a Hudson Institute senior fellow.
