The US Supreme Court appeared likely Tuesday to rule that insurance companies can collect $12 billion from the federal government to cover their losses in the early years of the health care law championed by President Barack Obama.
Several justices indicated their agreement with arguments from the insurers that they are entitled to the money under a provision of the Affordable Care Act that promised the companies a financial cushion for losses they might incur by selling coverage to people in the marketplaces created by the health care law.
The program only lasted three years, but Congress inserted a provision in the Health and Human Services Department’s spending bills from 2015 to 2017 to limit payments under the “risk corridors” program. Both the Obama and Trump administrations have argued that the provision means the government has no obligation to pay.
“Are you saying the insurers would have done the same thing without the promise to pay?” Justice Elena Kagan asked Deputy Solicitor General Edwin Kneedler. Kneedler said the health care law created a “vast new market” of customers, most of whom would qualify for subsidies.
“The primary point was to encourage companies to go on the marketplace,” Kneedler said.
Paul Clement, representing companies who sold insurance in Alaska, Illinois, Maine, North Carolina, Oregon and Washington, called the government’s refusal to pay a “massive bait-and-switch.”
The companies cite HHS statistics to claim they are owed $12 billion.