The Obama administration is seeking to toss out a pair of high-profile healthcare lawsuits in which insurers claim they are owed millions of dollars under the Affordable Care Act.
The two insurers, Moda Healthcare and BlueCross BlueShield of North Carolina, have sued the federal government over a combined $338 million in ObamaCare payments they argue are overdue.
The Justice Department filed motions to dismiss both lawsuits on Friday, arguing that the federal government isn’t responsible for those payments at all.
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Congressional Republicans are warning the Obama administration not to settle with insurers that have sued the government over an Affordable Care Act program to compensate them for losses under the law, saying such a move would bypass spending limits set by Congress.
Forty-six House Republicans signed a letter sent Thursday to Health and Human Services Secretary Sylvia Mathews Burwell saying they oppose any settlements and could sue the administration to block them.
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New York has revolted against a critical component of the Affordable Care Act: RiskAdjustment. If its revolt survives an almost certain legal challenge, a number of states are likely to double down on New York’s actions and remove one of the few remaining fingers holding Obamacare on to a cliff.
Acting under direction of its new Superintendant of Financial Services, Maria Vullo, New York has joined the chorus of those familiar with the program in contending that the federal Risk Adjustment program is backfiring. Critics say the program transfers too much money amongst insurers and is actually destabilizing the market. New York is the first state, however, to put money behind the critique.
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The Obama administration proposed this week new rules for its Risk Adjustment program, a critical component of the Affordable Care Act. There are actually some better-late-than-never parts of the proposal. Most notably the new rules will try to compensate for the extra expense insurers incur when people exploit ACA regulatory and enforcement weaknesses to time their insurance purchases to cover only expensive medical emergencies.
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Most health policy experts knew, and many warned, that the Affordable Care Act would lead to massive consolidation in the health care industry, including hospitals, physicians’ practices, and especially health insurers. Now the Justice Department is pushing back by opposing the mergers of four large health insurers—Aetna with Humana and Anthem with Cigna—as they try to survive the Obamacare wasteland.
The Obama administration defended its opposition by claiming the mergers would reduce competition.Attorney General Loretta Lynch explained, “If allowed to proceed, these mergers would fundamentally reshape the health insurance industry.” That’s rich, since nothing has reshaped the health insurance industry more than Obamacare—and by design.
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Two more health cooperatives have filed lawsuits against the Obama administration over a program in which insurers compensate each other for taking on sicker customers under the Affordable Care Act, following a similar lawsuit in June from another startup company.
New Mexico Health Connections and Minuteman Health of Massachusetts filed their cases on Friday afternoon, arguing the Obama administration mismanaged the program known as “risk adjustment” by creating an inaccurate formula that overly rewarded big insurers.
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The implementation of major legislation such as the Affordable Care Act (ACA) often results in fiscal outcomes that differ significantly from prior projections. Whenever this happens it leads to many questions, much confusion, and several claims and counter-claims. Rarely is it immediately clear whether the law is working differently than envisioned, or whether the unexpected outcomes are due to inevitable projection errors having nothing to do with the law.
On rare occasion, however, a prior projection proves so far off that its significance must be noted. Two weeks ago my colleague Brian Blase uncovered such a development with respect to the ACA’s Medicaid expansion. Recall that the ACA considerably expanded Medicaid eligibility – an expansion made optional for the states in a later Supreme Court ruling. It turns out that the 2015 per-capita cost of this Medicaid expansion is a whopping 49% higher than projections made just one year before.
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At issue in House v. Burwell is whether the administration has been illegally paying cost-sharing reduction subsidies to insurers. This issue was also the subject of a Republican House investigation, which resulted in a recent report concluding that the administration knowingly made the payments without a congressional appropriation, which is illegal.
In May, district court judge Rosemary Collyer sided with the House, deeming the payments illegal. The administration is appealing. If it is unsuccessful, it will be a serious blow to already struggling Obamacare exchanges.
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The Affordable Care Act continues to provide an opportunity for religious zealots to complain that someone, somewhere, might be doing something of which they disapprove. Another such case advancing through the courts is that of Missouri State Rep. Paul Wieland and his wife, Teresa, who assert that Obamacare’s contraceptive mandate tramples on their family’s religious rights even if they don’t make use of it.
St. Louis Federal Judge Jean Constance Hamilton thinks they may have a point. On Thursday she denied the government’s motion to throw out the case on summary judgment. Merely requiring individuals to buy an insurance policy that provides contraception could infringe on their religious conscience, she ruled in clearing the case for trial.
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The Obama administration cannot force a Missouri lawmaker and his family to carry health insurance that includes contraception coverage despite the Affordable Care Act’s requirement that insurers cover birth control, a federal judge ruled Thursday.
U.S. District Judge Jean C. Hamilton said Thursday that HHS may not compel Republican state lawmaker Paul Joseph Wieland, his wife Teresa Jane Wieland or their insurer to include contraception coverage in their health plan. The ACA’s contraception mandate otherwise requires group health plans and insurers to cover contraceptives and sterilization procedures.
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