A group of insurers will make their case to the Supreme Court today for billions of dollars in Affordable Care Act payments.
Driving the news: The court will hear oral arguments in a long-running dispute over the ACA’s risk corridors program. Insurers say they’re owed billions of dollars from that program; the government says it doesn’t have to pay.
Why it matters: The implications for the ACA are modest, but it's a lot of money for these insurers — about $12 billion, all told.
Risk corridors were designed to even out the ACA’s early days. Insurers with a better-than-expected experience in the exchanges paid in, and that money was then paid out to insurers that had a worse-than-expected launch.
- The amount the program was supposed to pay out exceeded the amount insurers had paid in. The assumption, at the time, was that the Department of Health and Human Services (HHS) would make up the difference itself.
- But then Congress passed an appropriations rider saying HHS couldn’t use its own money to cover risk-corridors payments, leaving billions of dollars unpaid.
Insurers sued, claiming HHS had essentially reneged on a promise, only after insurers put themselves on the line in a new marketplace under the expectation that this safety net would be there.
The other side: The government argues that “Congress did not expose the federal fisc to that massive liability” — that it never intended to create an open-ended expense “based on criteria that depended largely on the insurers’ own business judgments.”
Go deeper: The return of the ACA wars
