With Congress in the middle of a two-week recess, and having apparently given up on destroying Obamacare for the rest of the year, it’s a good time to catch up on their previous efforts to destroy Obamacare. Let’s focus on one: Sen. Marco Rubio’s successful effort to defund the “risk corridor” provision, or the “slush fund” for insurers, as he liked to call it. What it really was is a risk-sharing provision meant to cushion the first few years of the program. The law set a target for participating insurers to spend 80 percent of the premium dollars they got on actual services and quality improvement. If an insurer had costs less than 3 percent of that target, they paid into a fund, which insurers spending out more than 3 percent of that target would be reimbursed from.
This is particularly relevant now because a three-judge panel at the U.S. Court of Appeals for the Federal Circuit is about to decide on a suit brought by insurers who want their damned money. And it’s a lot of damned money.
The panel’s decision on cases brought by two insurers—Moda Health Plan Inc. and Land of Lincoln Mutual Health Insurance Co.—will resolve splits between lower court judges. It could also shape the outcome of other insurer lawsuits that would leave the government potentially owing as much as roughly $20 billion in past and future payments. Those cases, legal experts say, amount to the largest civil lawsuits ever. […]
“There’s piles of money on the table,” said Tom Policelli, former chief executive of Boston-based Minuteman Health, which is among dozens of insurers suing the government. “The federal government offered a deal to insurers and they need to hold up their end of it. Even the feds needs to pay their bills.”
Most of the lawsuits come down to a simple argument: Insurers say they were promised funding by the Obama administration under the ACA, but Republicans opposed to the law blocked the payments. That money, they say, is still owed to them because they suffered financial losses.
Piles of money includes all the suits—some three dozen of them—waiting in the wings, “including a class action on risk corridors that includes more than 100 insurers.” That suit “seeks ‘consequential damages’ and ‘special damages’—as do other suits filed by receivers for ACA co-ops that closed their doors.”
There’s the potential for the federal government to have to pay out tens of billions here. And it’s all largely because Marco Rubio wanted to have some kind of attack on Obamacare he could call his own while he was running for president in 2016. Now that he’s got that 2020 or 2024 glint in his eye again, let’s make sure and remember this.