Category: Investigations

Republicans and Democrats continued to talk at each other Friday about Obamacare’s cost-sharing reduction program in an Energy and Commerce oversight subcommittee hearing.

The hearing was the second in two days following the release of a GOP report claiming that payments to the administration’s program were made illegally.

Republicans suggested that the way the payments have been handled sets a dangerous precedent for the future and nullifies Congress’s power of the purse. Democrats chalked the investigation up as yet another GOP attempt to sabotage the Affordable Care Act. They also said since there is already a court case on the matter, Congress doesn’t need to do its own investigation.

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The Obama administration knowingly spent billions in health care dollars without proper congressional authority and went to “great lengths” to impede congressional scrutiny of the money, Republicans on two major House committees said in a report that will be made public on Thursday.

An extensive investigation by the Ways and Means and the Energy and Commerce Committees concluded that the administration plowed ahead with funding for a consumer cost-reduction program that was central to the new health insurance law even though Congress did not provide money for it.

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The Obama administration has been illegally funding Obamacare “Cost Sharing Reduction” (CSR) payments for years over the objections of IRS officials, according to a report released today by the House Ways and Means Committee and the House Energy and Commerce Committee.
Key findings:

-The administration initially submitted a CSR appropriations request for Fiscal Year 2014, but later withdrew it and began making payments illegally.

-CSR payments were created as one way to artificially hide the true costs of Obamacare through a web of government spending programs.

-After officials from the Obama Department of Health and Human Services (HHS) withdrew the CSR appropriations request, the administration begun illegally shifting funds from a separate appropriation.

-IRS officials expressed concern that this method of funding CSR payments was illegal so were briefed on the memorandum.

-Following this meeting, IRS officials continued to have concerns that the CSR payments violated federal law and raised concerns with IRS Chief John Koskinen.

-Shortly thereafter, DoJ and Treasury officials officially approved the decision to use an unrelated appropriation to make CSR payments.

With insurers struggling to make money and access to plans severely limited, top South Carolina health officials warn the Obamacare health insurance marketplace is on the verge of collapse.

Obamacare was supposed to create a competitive platform for customers to shop for coverage. But in most South Carolina counties, HealthCare.gov more closely resembles a monopoly dominated by the largest private health insurance company in the state — BlueCross BlueShield.

Next year, access to Obamacare in South Carolina will likely become even more limited. United Healthcare, which sells Affordable Care Act plans in five counties and in several other states, has announced it will leave most markets in 2017. The company estimates it lost $475 million on Obamacare customers across the country last year.

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Insurers from Oregon to Pennsylvania, including a failed health-care co-operative and two long-established Blues plans have lost billions of dollars selling Obamacare policies. Now they are suing the federal government to recoup their losses. In a testament to industry desperation, insurers are asking federal judges to simply ignore a congressional ban on the payment of these corporate subsidies.

The regulatory atrocity that is Obamacare inspired this race to the courthouse. Despite billions in subsidies — to both low-income individuals and well-capitalized insurance companies — the industry has incurred big losses in the individual market.

In a paper published June 28 by the Mercatus Center, Brian Blase (Mercatus), Ed Haislmaier (Heritage Foundation), Seth Chandler (University of Houston), and Doug Badger (Galen Institute) used data derived from insurance-company regulatory filings to determine the extent and source of those losses. The study examined the performance of 174 insurers that sold qualified health plans (QHPs) in 2014 to both individuals and small groups (generally companies with 50 or fewer workers).

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The billboards went up quickly. The customers came in droves.

Then, in October, Arches collapsed as suddenly as it went up.

Now eight months after it was announced that the state’s only nonprofit insurance co-op would be dissolved, Utah hospitals are still waiting on about $33 million in outstanding claims that the Utah Department of Insurance says it likely cannot pay until 2017.

Officials with the insurance department say they are doing the best they can to create a “soft landing” for Arches after the federal government reneged on what was supposed to be a $11 million payment this summer.

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A struggling Illinois health insurance co-op is suing the federal government, claiming it is being shortchanged $72.8 million in promised payments under the Affordable Care Act.

Chicago-based Land of Lincoln Health filed the lawsuit Thursday in the U.S. Court of Federal Claims in Washington, D.C. At least four other insurers have filed similar claims over the so-called risk corridor payments, a temporary provision of the health care law meant to help unprofitable insurers and stabilize consumer prices during the first three years of the law’s new insurance exchanges.

Land of Lincoln’s balance sheet has been deteriorating rapidly. The 3-year-old startup lost $90 million in 2015 and $7 million in the first quarter of 2016.

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Sen. Rob Portman (R-Ohio) released a letter to the Obama administration on Thursday asking what it will do to help Ohioans who received coverage from a failed Obamacare co-op.

Last month the nonprofit co-op InHealth announced that it would be liquidated and taken over by the state. It provided health coverage to about 22,000 state residents. In his letter, Portman said those enrollees now must choose between getting new insurance and starting over paying a new deductible, or paying the tax penalty for not having health insurance.

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The IRS raised concerns in early 2014 about the legality of certain ObamaCare payments that Republicans are now challenging in a lawsuit, according to a deposition from a former agency official.

David Fisher, who was the IRS’s chief risk officer, told the House Ways and Means Committee that agency officials questioned whether the Affordable Care Act provided the authority to make certain payments to insurers without an appropriation from Congress.

Most senior IRS officials ended up concluding that the payments were legal after a meeting with the White House to hear its legal justification, and the administration eventually went ahead with disbursing the funds.

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Blue Cross and Blue Shield of North Carolina sued the federal government, becoming the latest health insurer to claim it is owed money under the Affordable Care Act.

The suit, filed on Thursday in the U.S. Court of Federal Claims in Washington, D.C., says the U.S. failed to live up to obligation to pay the insurer more than $147 million owed under an ACA program known as “risk corridors,” which aimed to limit the financial risks borne by insurers entering the new health-law markets.

The suit argues that the federal government violated the language of the health law, as well as a contractual obligation to the North Carolina insurer.

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