GOP Moves to Block Illegal Obamacare Bailouts
David Catron
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House and Senate Republicans have introduced legislation to prevent the Obama administration from executing a last-minute end run around Congress to bail out insurers that lost money on Obamacare. Rep. Morgan Griffith put forward a bill in the House last Thursday. Senator Marco Rubio and three colleagues introduced a similar measure in the upper chamber on Friday. The purpose of both bills is to stop President Obama’s creatures at the Centers for Medicare & Medicaid Services (CMS) and the Department of Justice (DOJ) from using an esoteric Treasury account called the “Judgment Fund” to make disbursements Congress hasn’t authorized.

Congress is the only branch of the federal government empowered by the Constitution to spend taxpayer money, but the White House has repeatedly flouted this legal inconvenience. This is why U.S. District Judge Rosemary Collyer ruled against the Obama administration last May following a similar attempt to circumvent congressional prerogatives. The legislation introduced in the House and the Senate last week involve a probable attempt by the White House during the final weeks of the President’s term to sidestep congressional restrictions placed on the amount of money that can be disbursed via Obamacare’s “risk corridor” program.

For those who may have forgotten how the risk corridor program was supposed to work, the idea was that insurers enjoying big profits from Obamacare would pay into a pool from which less fortunate plans would be subsidized. Congress added an additional twist in 2015 by requiring that the risk program remain budget neutral. Inevitably, Obamacare’s perverse incentives created such a distorted risk pool that no participating insurer received anything like “big” profits. So, in late 2015, CMS announced that profitable insurers had paid in a mere $362 million, while their unprofitable counterparts had requested over $2.87 billion to cover their losses.

Consequently, the Obama administration had no legal way to honor its implicit promise to use taxpayer dollars to shore up the bottom lines of insurance companies willing to collude with the Democrats on the Obamacare boondoggle. When these insurers lost their shirts and the risk corridor money failed to materialize, they sued the government. Health Republic Insurance Company filed a class action lawsuit for $5 billion, Highmark Health sued for $223 million, Moda Health filed a $180 million suit, Blue Cross & Blue Shield of North Carolina has sued for $129 million, Land of Lincoln Health has filed a $70 million suit, ad infinitum.

At the time the suits were filed, it wasn’t clear what these insurers hoped to accomplish. There was no legal way the government could pay even if the plaintiffs somehow managed to find a court that would ignore the law and rule in their favor. Then, in September, the Obama Justice Department and CMS began making noises to the effect that the Judgment Fund could be used to “settle” these lawsuits out of court. However, as Senator Rubio’s website points out, “The Congressional Research Service (CRS) responded to a request from Rubio and issued a legal opinion finding it would be illegal to use the Judgment Fund to settle such claims.”

Sadly, the record of the Obama administration is such that no one trusts the President or his minions to obey the law. Indeed, it’s probable that someone from CMS or the DOJ actually suggested the lawsuit scam to the 14 insurers that have now filed claims against the government. Rep. Griffith notes, “I asked Acting Administrator of CMS, Andy Slavitt, if the federal government was obligated to pay insurance companies who lost money from Obamacare.… Slavitt said, ‘Yes. It’s an obligation of the federal government.’… Furthermore, he implied they are working with the Justice Department, and could possibly use the Judgment Fund.”

Thus, the Griffith bill (HR 6339) clearly stipulates that “no amounts may be paid from the fund… for any compromise settlement in connection with any proceeding brought against the Government under section 1342 of the Patient Protection and Affordable Care Act.” The Senate bill, whose co-sponsors are Senators Ben Sasse, John Barrasso, and Mike Lee, outlines similar spending prohibitions: “The ‘HHS Slush Fund Elimination Act’ would prohibit the government from using the Judgment Fund, or any other federal funds, to pay any final judgment, award or settlement compromise related to any lawsuits related to the ACA’s risk programs.”

The House and Senate bills are, of course, just stopgap efforts. As Senator Rubio phrases it, “Repealing and replacing ObamaCare is a top priority in the coming months, but one of the biggest battles we face right now is stopping the Obama Administration from ignoring and using billions in taxpayer dollars to bail out health insurance companies.” Perhaps they will prevent our lame-duck President from engaging in any further skulduggery with taxpayer funds. In the end, however, our money will not be safe until Barack Obama moves out of the White House in January, and takes his shameless accomplices at CMS and the DOJ with him.

David Catron
David Catron
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David Catron is a health care consultant and frequent contributor to The American Spectator. You can follow him on Twitter at @Catronicus.
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