Supreme Court rules against a GOP effort to renege on owed payments to health insurers

On Monday, the US Supreme Court ruled against an effort of several years ago led by Senator Marco Rubio to shortchange health insurers money owed to them for accepting higher risk claimants early on under the Affordable Care Act. In essence, Rubio led GOP Senators to eliminate 89% of the funding under a risk corridor agreement to tie insurers through initial adverse risk (due to pent up demand from folks who were not previously covered).

The following excerpt from an article called “Supreme Court rules government must pay billions to Obamacare insurers,” by Susannah Luthi of Politico, may be of interest.

“The Supreme Court on Monday ruled the federal government owes health insurers massive payments from an Obamacare program shielding them from financial risks after the companies accused Washington of reneging on its funding promises.

The 8-1 decision could open the floodgates for federal cash to the insurance industry. Insurers who accused the government of a ‘bait and switch’ claimed they’re owed $12 billion from the Affordable Care Act program.”

The lone dissenting vote was from Justice Samuel Alito who said the insurers were getting a “windfall.” No, Justice Alito and Senator Rubio, they are getting what was promised in writing.

People could easily dismiss this as a fight that does not concern them. That would be a misjudgment. The Republican Senators led by Rubio screwed Americans to win a political argument in attempt to sabotage the ACA. Why do I say that? As a consequence, these insurers had to raise premiums that impacted unsubsidized folks and caused an increase to the offsetting premium credit under the ACA for the subsidized folks. That subsidy increase in turn increased our budget deficit. It also forced some insurers to exit the ACA with the US government owing them money, which hurt competition.

Sadly, all of the efforts noted above, which the Supreme Court just overturned, are true. That is a reason for the near unanimous vote. I encourage you to Google “Marco Rubio and ACA Risk Corridors” and read as much as you like. What frustrates this retired benefits consultant, manager and actuary is very few people know they got screwed. The following links to this article and one of my many pieces on shoring up the ACA are below.

https://www.politico.com/news/2020/04/27/supreme-court-rules-government-must-pay-billions-to-obamacare-insurers-211184

https://musingsofanoldfart.wordpress.com/2019/07/19/please-stabilize-the-affordable-care-act-now-to-help-americans/

8 thoughts on “Supreme Court rules against a GOP effort to renege on owed payments to health insurers

  1. I had seen the headlines, but not read about the Court’s decision in depth, so I wasn’t aware that the decision was nearly unanimous. I’m disappointed in Alito, but so be it … he was outnumbered and that’s what counts. There are now more than 27.5 million people uninsured in this country, many because of the games Trump and his cronies played after they took office. And why? Largely because ACA had President Obama’s signature on it. Good post … thanks, Keith!

    • Well said. It should be noted Trump refused to reopen the ACA for a special enrollment due to the COVID-19 virus against the recommendations of his advisors. He did not want to show favoritism to the ACA even if it helped people.

      • Jill, I put a quick comment on his Trump like reaction (the opposite of what a leader would say) to George W. Bush’s call for unity. This comment was added to the post on people saying we should support the president. Maybe the answer is we would support a president if he ever shows up. Keith

      • I agree with you on that. I honestly feel that we have no leader, no sane person in charge. This pandemic crisis has highlighted that, but think about it … what if there were another crisis, say a nuke launched in our direction. Would you feel safe with Trump at the helm? Not me. Sigh.

      • I just went and saw your addendum. In the past three years, there have been a couple of times I’ve been proud of “W”, and frankly, while I had issues with some of his policies, particularly as related to Iraq, it’s all relative and relative to the current “person in the Oval Office”, Bush is a saint!

      • Jill, W deserves credit for what he said, but Trump has a very hard time giving credit, usually doing the exact opposite.

        By the way, I sent a variation of this post in an email today. Feel free to share. Keith

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