Administration Plans to Make Insurer “Bailout” Payments Illegally

Informed observers believe that the U.S. Department of Health & Human Services (HHS) will make “bailout” payments to health insurers under Obamacare’s risk-corridor program, despite a growing body of legal opinion that such payments would be illegal. As previously discussed at this blog, both the Government Accountability Office and the Congressional Research Service have held that the Administration needs Congress to appropriate funds in order to make risk-corridor payments.

For 2014, risk-corridor payments may have inadvertently been wrapped up in the general appropriation for HHS. However, House Republicans were not really on top of the issue back then. The Continuing Resolution for 2015 will likely contain language preventing risk-corridor payments. This is an issue on which NCPA has exerted significant influence. I testified to the House Committee on Oversight and Government Reform on June 18, and NCPA has published that testimony as an Issue Brief: Risky Business: Will Taxpayers Bail Out Health Insurers?

If the Administration bails out the health insurers in 2015 without benefit of appropriations, expect to see yet another raft of lawsuits launched against Obamacare.

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