U.S. Supreme Court rejects insurance companies on Obamacare reimbursement

The U.S. Supreme Court on Monday denied hearing an offer from health insurance companies to seek full reimbursement from the federal government under a provision of the Obamacare Act with the intent of encouraging them to offer medical coverage to uninsured Americans.

The judges dismissed complaints from private insurance companies Maine Community Health Options, Community Health Choice Inc and Common Ground Healthcare Cooperative.

The insurers had said that they collectively owed millions of dollars for each year they did not receive payments that the government had committed to make under the 2010 law, formally called the Affordable Care Act. Lawsuits will now continue in lower courts on how much insurance companies can claim.

The Supreme Court left an August 2020 ruling by the U.S. Court of Appeals for the Federal Circuit that insurers’ reimbursement of money owed could be offset by other income they received from the government in the form of premium tax deductions.

U.S. Supreme Court rejects insurance companies on Obamacare reimbursement

U.S. Supreme Court Building in Washington, DC, May 17, 2021. REUTERS / Jonathan Ernst / File Photo

The Supreme Court in an 8-1 decision in April 2020 in an earlier phase of the same lawsuit ruled that the federal government should “respect its obligations” and pay various private insurance companies up to $ 12 billion. However, when the case returned to lower courts following this decision, the federal government continued to argue that it was not obligated to pay in full, creating a new round of legal battle.

Unlike other lawsuits involving Obamacare – long targeted by Republicans for repeal in Congress or annulment through the courts – this case only concerned payments to insurance companies and did not directly challenge the law itself.

The court in a 7-2 ruling last Thursday rejected a Republican challenge to the law, the third time the judges have retained Obamacare over the past decade.

The insurance companies have said the government should help them recover from early losses they suffered after the law was passed by Congress and signed by former Democratic President Barack Obama.

The law has made it possible for millions of Americans who previously had no medical coverage to obtain insurance, including those with pre-existing medical conditions, despite an extension of the Medicaid program for the poor and though private insurance companies.

Payments to insurers would have come through the law’s so-called risk corridor program designed to reduce insurers’ risks from 2014 to 2016, when they sold coverage to previously uninsured through exchanges established under Obamacare.

Insurance companies that paid out significantly less receivables on policies sold through the stock exchanges than they took in from premiums delivered some of their gains to the government. Insurance companies that paid more were entitled to compensation from the state for part of their losses.

From 2015 to 2017, Congress passed legislation preventing the U.S. Department of Health and Human Services from using general funds to pay the government’s risk corridor commitments. Health insurance companies turned to federal courts to obtain the payments.

(Reporting by Lawrence Hurley; Editing by Will Dunham)

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