SCOTUS: Fed Govt Owes Insurers Billions

SCOTUS: Fed Govt Owes Insurers Billions

( – On Monday, April 27, the Supreme Court ruled in an 8-1 decision the federal government owes insurance companies $12 billion. The ruling comes as insurers claim the federal government pulled a “bait and switch” act in regards to the “risk corridors” element of the Affordable Care Act (ACA).

In the early years of the ACA, the law created a program called “risk corridors” to protect insurance agencies from large losses due to sicker customers using insurance. The result? The health insurance industry racked up $12 billion in losses from 2014 to 2016. In 2015, Republicans approved riders in bills prohibiting the Health and Human Services Department (HHS) from using taxpayer dollars to fund the program.

The Supreme Court said congressional spending restrictions didn’t release the government from spending limitations or its original promise to fund the risk corridors. Speaking for the majority, Justice Sonia Sotomayor said the government should honor its obligations. Justice Samuel Alito was the lone dissent, arguing the ruling created a massive bailout for the insurance industry.

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