A Republican lawmaker charged that the Obama administration is trying to circumvent Congress to bail out failing Obamacare insurers.
The Obama administration is being sued by several insurers for a lack of funding from the healthcare law’s risk corridor payments, designed to offset insurer losses. A GOP lawmaker questioned during a Wednesday hearing whether the administration doesn’t mind losing the lawsuits to give the insurers the money.
“Was the purpose to invite lawsuits and provide the risk corridor payments through the judicial process?” Rep. Ron DeSantis, R-Fla., asked an Obama administration official during a Wednesday hearing of the House Oversight and Government Reform Committee.
“This is an obligation of the federal government,” responded Mandy Cohen, chief operating officer of the Department of Health and Human Services, referring to the risk corridor payments.
She added that the Department of Justice, not HHS, is handling the lawsuits.
DeSantis’ questions center on a Sept. 9 memo from the Centers for Medicare and Medicaid Services on risk corridors, a program that pays insurers for big losses and forces insurers with minimal losses to pay into the program.
The program is intended to mitigate losses for insurers as they navigate a new market created by Obamacare’s exchanges.
Congress required the program to be budget neutral, meaning that it could pay out only what it took in. For the 2014 coverage year, insurers requested nearly $3 billion in payments but received 12 percent of that.
CMS said on Sept. 9 that all of the money collected from the 2015 coverage year will go to pay for shortfalls in the 2014 coverage year.
The memo also mentioned the lawsuits filed by a half a dozen insurers to get the risk corridor payments due to them.
“As in any lawsuit, the Department of Justice is vigorously defending those claims on behalf of the United States,” the memo said. “However, as in all cases where there is litigation risk, we are open to discussing resolution of those claims.”
DeSantis speculated if this was the administration’s plan all along, it could circumvent Congress’ requirement that the program be budget neutral.
