WASHINGTON (CN) – A federal judge ruled Monday that the government will not have to repay a Maine insurer who did not receive payments from the so-called “risk corridors program” of the Affordable Care Act.
Through the risk corridors program, profitable insurance providers paid into a pool from which insurers who had higher-than-expected costs could draw to partially cover their losses.
The program was meant to prevent insurers from drastically raising their premiums in the first three years the Affordable Care Act, but the money in the pool quickly dried up, with the federal government owing insurers more than $8 billion under the program.
Congress in 2014 included a provision in the federal budget that requires the risk corridors program to be revenue neutral, meaning it could only make payments to insurers using money that came into the fund. The Centers for Medicare and Medicaid Services announced the same year that it would only pay back 12.6 percent of what insurers claimed under the program, leading to a string of lawsuits.
U.S. District Judge Eric Bruggink, of the U.S. Court of Federal Claims, ended one such suit on Monday, ruling that the government could not pay Maine Community Health Options back for roughly $23 million it claims it is owed under the risk corridors program.
Maine Community Health Options filed the suit in August 2016, claiming the Affordable Care Act required the Department of Health and Human Services to make payments to qualifying insurers under the risk corridors program.
The government countered by saying Congress had prevented it from making those payments, an argument that Bruggink found persuasive.
Bruggink pointed to a line from the Congressional Budget Office report on the Affordable Car Act, better known as Obamacare, that treated the risk corridors program as revenue neutral, as well as the way the Department of Health and Services treated the program, to back up his finding.
But it was the 2014 provision in the budget that ultimately made the case for Bruggink, who wrote in a 23-page opinion that Congress clearly meant to limit what the government could pay insurance companies to the money profitable insurers paid into the fund.
“Congress controls the purse,” Bruggink wrote. “Within certain limitations, which we find not to be relevant here, it has the right to nullify what would otherwise appear to be binding commitments, and it did so here.”
A representative for Maine Community Health Options did not immediately respond to a voicemail requesting comment on the lawsuit.