Wednesday, February 20, 2019
Check out Nick Bagley's two-part series at Take Care on the cases coming out of the Court of Federal Claims that say that the government has to pay up its cost-sharing obligation to insurers on the Affordable Care Act exchanges--even though Congress didn't appropriate funds to do so.
The short version: Three different judges have now ruled that the ACA created an obligation on the part of the government to make the cost-sharing payments to insurers on the exchange; that Congress's refusal to appropriate funds (without more) doesn't change that obligation; and that the obligation is now enforceable in court (under the Tucker Act).
The rulings could mean that the government owes insurers about $12 billion a year.
The rulings may seem in tension with Judge Collyer's (D.D.C.) ruling that President Obama lacked authority to make cost-sharing payments without a congressional appropriation. But they're not: These cases say that the government created an obligation in the ACA, and that it must now make good on that obligation, one way or another. Congress's refusal to appropriate money in the particular cost-sharing line item (which was the basis of Judge Collyer's ruling) only means that Congress has to either fund that line or find a new source to pay the insurers. (The Court of Federal Claims notes that judgments from that court come from the Judgment Fund, a permanent, indefinite appropriation to pay judgments against the United States. So if the rulings stick, Congress wouldn't have to do anything.)
As to that second step---that Congress's refusal to appropriate funds doesn't change the underlying obligation--here's how one judge explained it:
Here, Congress has had ample opportunity to modify, suspend, or eliminate the statutory obligation to make cost-sharing reduction payments but has not done so. . . . Congress has never enacted any such appropriation riders with respect to cost-sharing reduction payments, even when cost-sharing reduction payments were being made--during both the Obama and Trump administrations--from the permanent appropriation for tax credits . . . . Thus, the congressional inaction in this case may be interpreted contrary to defendant's contention, as a decision not to suspend or terminate the government's cost-sharing reduction payment obligation.
In short, Congress's failure to appropriate funds to make cost-sharing reduction payments through annual appropriations acts or otherwise does not reflect a congressional intent to foreclose, either temporarily or permanently, the government's liability to make those payments.
Now the interesting question is whether the insurers' mitigation efforts (through "silver loading") mean that the government doesn't have to pay, or at least doesn't have to pay as much. Check out Bagley on this.