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.
. . .
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.
. . .
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.
. . .
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.
. . .
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.
. . .
Things have gone from bad to worse for the Affordable Care Act’s health-care co-op experiment.
Maryland’s co-op, Evergreen Health, filed a first-of-its-kind lawsuit in June against the federal government claiming that private insurers have gamed the system to avoid making “risk adjustment payments.” Under the ACA, insurers with healthier members must make these payments to insurers with unhealthier members. But Evergreen CEO Peter Beilenson argues that his co-op was unfairly labeled as healthier because private insurers encouraged their less healthy members to go to the doctor so their patient pools would appear less healthy. Evergreen is now expected to owe between $18 million and $22 million in risk adjustment payments.
. . .
Lawyers well versed in federal health policy are skeptical that a handful of insurers will triumph in their lawsuits against the Obama administration over two separate but similar payment provisions of the Affordable Care Act (ACA).
Six insurers, including several of the ACA-created Consumer Operated and Oriented Plans, or CO-OPs, are suing the administration over money, while a number of others are 23 Comments lawsuits.
The insurers are suing over the ACA’s risk corridor and risk adjustment programs, which make up two of the “three Rs” built into the law to compensate insurers for losses stemming from market volatility in the first few years of ACA implementation.
. . .
Health insurers in New Mexico and other states are gearing up for a legal fight with the Obama administration over millions of dollars the insurers both owe and are owed under separate provisions of the Affordable Care Act (ACA).
New Mexico Health Connections, the state’s Consumer Operated and Oriented Plan, or CO-OP, confirmed to The Hill that it is working with lawyers to frame lawsuits on both ObamaCare’s risk-adjustment and risk-corridor provisions, which make up two of the so-called three Rs of the ACA’s premium stabilization program.
. . .
The battle between congressional Republicans and the White House over the Affordable Care Act is again escalating—in court and on Capitol Hill.
The administration on Wednesday appealed a federal trial judge’s ruling that the government is improperly reimbursing insurers under a program to cover discounts for low-income consumers.
And House Republicans on Thursday began two days of hearings to hammer away at the issue. They released a report that said the administration distributed the funds even though it was aware it needed Congress’s approval.
. . .
The Obama administration suffered a setback in its efforts to strengthen the individual insurance market when a federal appeals court last week struck down an HHS rule barring the sale of certain limited-benefit plans as stand-alone products.
In Central United Life v. Burwell, the U.S. Court of Appeals for the District of Columbia Circuit overturned a 2014 HHS rule restricting the sale of fixed-indemnity insurance plans that pay policyholders fixed dollar amounts to cover medical services regardless of how much the provider bills. These plans, which are cheaper to buy than comprehensive plans but exclude pre-existing conditions, do not comply with Affordable Care Act provisions on minimum essential benefits or guaranteed issue.
. . .