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The Affordable Care Act was before the Supreme Court once again today. A Democratic Congress passed the ACA in 2010. The law promised to partially reimburse insurers if they lost money by covering people with preexisting medical conditions. Then in 2015, Republicans took over Congress, and they refused to appropriate money for these payments. NPR legal affairs correspondent Nina Totenberg reports.
NINA TOTENBERG, BYLINE: Today’s case is about something called risk corridors, designed to encourage insurance companies to enter the market to cover previously uninsured people. The premise is that competition will keep prices down. Think of the risk corridor as a road. Operating in the center is the ideal. Charge too much, and the law requires the insurance company to pay some of that money back. Charge too little, and the government promises to cover some of the insurance company’s losses. But after Republicans won unified control of Congress, they refused to appropriate the money to fulfill the ACA’s payout promise to insurers. The consequences were profound. By 2017, three-quarters of the original providers in the insurance exchanges were out of business. Several others stopped participating, leaving just six providers and skyrocketing premiums. The insurers went to court, contending the government had cheated them out of $12 billion in promised payments. One of those insurers is Maine Community Health Options, a nonprofit. On the steps of the Supreme Court today, CEO Kevin Lewis said that since 2015, the government has failed to live up to its promise to cover $59 million of the company’s losses, and the failure to pay has hurt badly.
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KEVIN LEWIS: We had to pull back from New Hampshire. We had to do certain things that injured the company and injured our members. And we have only been able to crawl back from that.
TOTENBERG: Inside the Supreme Court, lawyer Paul Clement, representing the insurers, told the justices that the case involves a massive government bait and switch. When the government makes a promise to pay money, he said, it has to keep its word. Justice Alito asked caustically why there should be a special solicitude for insurance companies. Chief Justice Roberts chimed in – you claim that the insurance companies were basically seduced into this program, but they have good lawyers. Why didn’t they insist on an appropriations provision in the law before putting themselves on the hook for $12 billion? Clement replied that when the law was enacted, anyone who looked at the money mandating language would have thought that was sufficient. Now, could it have been better – belt and suspenders? Sure, but it’s good enough, he said.
The tenor of the argument turned dramatically, however, when the Trump administration’s deputy solicitor general, Edwin Kneedler, rose to defend the refusal to Pay. Justice Breyer – this is day one of contracts law. I say to you, my hat’s on the flagpole. If you bring it down, I’ll pay you $10. How does this differ? Why does the government not have to pay its contracts just like anybody else? Kneedler replied that without an appropriation by Congress, the government can’t pay. Justice Ginsburg, pointing to language in the ACA, said Congress didn’t repeal that language, saying that the government shall pay. There weren’t sufficient votes in Congress to repeal that obligation, she noted.
Chief Justice Roberts – you don’t dispute that these companies would not have participated in the risk corridor program but for the government’s promise to pay. Justice Breyer – the government says we shall pay you, mister private citizen, if you do X. He does X, but the government doesn’t have to pay him? Justice Kavanaugh – Congress knows how to pass a law that prevents a promise to pay from being binding in the future. It can promise to pay, subject to future appropriations. In fact, it does that often. Justice Kagan – that language puts people on notice. It says this is not a guarantee. And when that language is not there, the government says, we’re committed. Under this program, she asked, are insurance companies obligated to pay into the program if they have excess profits? Yes, replied the government’s Kneedler. So you pay in? That’s obligatory, Kagan shot back. But if the government commits to paying out, it turns out it’s only if we feel like it? What kind of a statute is that? A decision in the case is expected before summer.
Nina Totenberg, NPR News, Washington.
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