Dive Brief:
- Fifty conservative groups, led by Freedom Partners, sent a joint letter Wednesday asking members of Congress to discontinue any further insurer "bailouts" under provisions of the Affordable Care Act.
- The groups lent their backing to two bills that would block funds to insurers under the ACA's controversial risk corridors and reinsurance programs.
- One of the measures in question would specifically stop the Obama administration from using the Treasury Department's Judgment Fund to pay insurers via legal settlements.
Dive Insight:
The groups argued the administration's plan to use the Treasury fund is an attempt to work around Congress to make the contested risk corridors payments, and criticized the HHS for essentially inviting insurers to sue for that purpose. They are asking Congress pass legislation to prevent the use of the fund or any other taxpayer dollars for insurers.
The program was created to protect insurers participating in the experimental first years of the ACA exchanges, and many toppled or pulled back when they were blindsided with payments just 12.6% of what they were expecting.
Regarding the reinsurance program, HHS is facing an increasingly uphill battle after a recent report by the Government Accountability Office sided with the GOP in concluding HHS exceeded its authority in prioritizing reinsurance payments to insurers over payments to the U.S. Treasury when funding fell short.
The administration has disputed the GAO's finding and it has been unclear what the next steps will be, given that the GAO does not have the power to enforce its view. The coalition is supporting a GOP-backed bill, the Taxpayers Before Insurers Act, that would require the administration to pay the full amount of the reinsurance funding into the Treasury, which would amount to $5 billion over three years.
A coalition comprised of some of the same groups sent a similar letter advocating against the two programs last year. However, it may be in vogue to hate on ACA provisions if you're conservative but the truth is these intended risk corridor payments aren't "bailouts"; insurers are due the money owed to them under the law.