Audits and investigations into the effects of ObamaCare from congressional committees, government auditors, advocacy groups, and others.
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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A few weeks back, I noted that a judge had ruled against the Obama administration in a dispute over health-insurance subsidies. Some background: Obamacare makes insurers reduce out of pocket costs, like deductibles, to low-income people who purchase qualifying plans; the government is supposed to reimburse the companies directly. However, Congress didn’t appropriate any money to pay for these subsidies. When the administration went ahead and paid the insurers anyway — distributing about $7 billion without congressional approval — House lawmakers sued.
Now it appears that House Republicans, and Judge Rosemary Collyer, aren’t the only folks who thought the administration’s actions were questionable. A report in the New York Times this weekend says that IRS officials raised concerns that the administration had no legal authority to spend the money.
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House Republicans and the Obama administration are clashing over subpoenas for ObamaCare documents. Republicans are upping the pressure on the administration, saying officials are withholding documents that Congress has every right to see.
At issue are two separate portions of ObamaCare. One is the Basic Health Program, which states can choose to implement and is aimed at providing choices for low-income people with slightly too much income to qualify for Medicaid. The other is the law’s “cost-sharing reductions” which are payments that help lower out-of pocket-costs for low-income ObamaCare enrollees.
“Your refusal to provide the requested documents and information raises serious concerns about the Department’s willingness to be accountable for the lawful execution of laws passed by Congress,” Energy and Commerce Chairman Fred Upton and House Ways and Means Chairman Kevin Brady wrote to Health and Human Services Secretary Sylvia Mathews Burwell on Tuesday.
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Yesterday, the New York Times detailed the highly irregular manner preceding the administration’s decision to make the CSR payments once Congress refused to grant the White House’s request for an appropriation. Despite strong disagreements over the legality of these payments among IRS employees, top political appointees with the administration, including then-Attorney General Eric Holder and Treasury Secretary Jack Lew, signed off.
At a congressional deposition, David Fisher, an IRS financial risk officer at the time, testified that the process behind the authorization of the CSR payments was unusual. Moreover, he testified that the “cost-sharing reduction payments are not linked to the Internal Revenue Code, as far as I could tell, directly anywhere. There is no linkage to the permanent appropriation, nor is there any link to any other appropriation that was indicating what account these funds should be paid from.”
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House Republicans say that the Obama administration is ignoring subpoenas for documents related to ObamaCare spending they call illegal.
“Your refusal to provide the requested documents and information raises serious concerns about the Department’s willingness to be accountable for the lawful execution of laws passed by Congress,” Upton and Brady write to HHS Secretary Sylvia Mathews Burwell.