In an ongoing backdoor attempt to pay off insurers burned by President Barack Obama’s signature legislation, the Affordable Care Act (ACA), the Obama administration is creating the framework needed to implement a “public option,” the precursor to a single-payer health-care system.
Distracted by the presidential election and the news that ACA insurance premiums will increase by an average of 25 percent in 2017, many have failed to notice the administration’s plan to use a special U.S. Department of Justice (DOJ) fund, called the Judgment Fund, to funnel billions of dollars to insurers without congressional approval. If it successfully executes this plan, the Centers for Medicare and Medicaid Services (CMS) will have circumvented Congress to secure a taxpayer bailout for insurers — directly contradicting Congress’s intentions as expressed by multiple spending bills, and possibly violating federal law.
Currently, insurers are suing HHS for more than $2.5 billion promised them under ACA’s “risk corridor” program, which was designed to redistribute earnings from more profitable insurers in ACA exchanges to less profitable insurers. In 2014, insurers requested $2.9 billion in risk-corridor payments to cover their losses, but only $362 million had been paid into the program by profitable insurers, forcing CMS to pay insurers 12 cents on the dollar. By now, insurers have run up the tab to between $5 billion and $15 billion, according to Andy Koenig, the former policy director for the House Republican Conference and a senior policy adviser to the Freedom Partners Chamber of Commerce.
