The Obama administration has filed motions to dismiss lawsuits from two insurers that claim they are owed extra payments by the federal government for losses from Obamacare customers.
Moda Healthcare and BlueCross BlueShield of North Carolina have sued the administration for a total of $338 million in payments through the “risk corridor” program set up under the Affordable Care Act.
The two companies are among a number of insurers who requested more payments through the program than the administration was able to give. The risk corridors are supposed to give insurers with heavy losses a financial boost, by using payments from insurers that are doing better financially.
But insurers have sought far more funds than are available, requesting $2.87 billion in 2014. The Obama administration was able to pay out only $363 million, after Republicans passed legislation banning the Department of Health and Human Services from shifting around money to fully cover the funding requests.
In court documents filed Friday, the Justice Department argued that HHS doesn’t owe any money to the insurers, since Congress has blocked it from using alternate funds.
“Under Moda’s interpretation, HHS would be the uncapped insurer of the insurance industry itself,” the Justice Department wrote. “Congress did not intend that result.”
Yet the administration has hinted it would be willing to settle lawsuits with insurers, which could be a way to make those payments despite efforts by Congress to limit the risk corridor program. The Centers for Medicare and Medicaid Services suggested as much in a memo last month.
