The fight over whether the Obama administration broke the law by prioritizing insurers over billions of dollars in payments to the U.S. Treasury through a program implemented under Obamacare is only beginning.
Following the release of a memo from the Congressional Research Service last week, Republicans on the House Energy and Commerce Committee pressed Health and Human Services Secretary Sylvia Mathews Burwell on the $3.5 billion illegally diverted to insurance companies under Obamacare’s transitional reinsurance program. The nonpartisan agency said the administration violated the Affordable Care Act’s language in prioritizing insurers over the Treasury.
Now Republicans in both the House and the Senate say they plan to continue pressing the Obama administration on its decision to redirect the money.
“HHS should remember that breaking the law with regards to Obamacare is why the House sued them in the first place,” David Pasch, spokesman for Rep. Peter Roskam, R-Ill., told The Daily Signal.
Pasch was referring to a lawsuit the House of Representatives filed against the Obama administration in 2014. The lawsuit challenges the legality of the health care law’s cost-sharing subsidies, which the House argued were funded without an appropriation from the lower chamber.
Roskam serves as chairman of the House Ways and Means Subcommittee on Oversight, and he, along with Ways and Means Chairman Kevin Brady, R-Texas, and Subcommittee on Health Chairman Pat Tiberi, R-Ohio, sent Burwell a letter earlier this month requesting information on the transitional reinsurance program.
“In some circumstances, Congress delegates discretion to agencies to implement laws,” they wrote. “However, when Congress withholds discretion, as was the case here, agencies are bound to carry out the law as written or seek assistance of Congress to change it.”
Pasch told The Daily Signal that Roskam and the Ways and Means Oversight Subcommittee will “consider all remedies available to ensure the administration follows the law” and plans to hold hearings and introduce legislation addressing the redirection of $3.5 billion to insurers.
Thus far, Republicans in the House have taken the lead on looking into Obamacare’s reinsurance program. But the Senate isn’t planning to stand idly by.
Julia Lawless, spokeswoman for the Senate Finance Committee, told The Daily Signal the committee, chaired by Sen. Orrin Hatch, R-Utah, is “taking steps” to look into the reinsurance program and redirection of $3.5 billion to insurance companies.
“This is yet another serious problem with the president’s flawed health plan that must be further scrutinized,” Lawless said.
Republicans characterized the Centers for Medicare and Medicaid’s decision to divert billions away from the Treasury and to insurers as a bailout for insurance companies.
“CMS to date has diverted $3.5 billion from the Treasury to help the insurance companies, effectively bailing out insurance companies with taxpayer dollars,” Rep. Joe Pitts, R-Penn., said last week during the Energy and Commerce hearing.
In addition to the transitional reinsurance program, such a characterization was also used to describe Obamacare’s risk corridor program, which sought to limit excess losses and gains incurred by insurance companies selling coverage on the federal and state-run exchanges.
Under the risk corridor program, insurance companies that lost money beyond a threshold set by the government received money from the Centers for Medicare and Medicaid Services.
Sen. Marco Rubio, R-Fla., brokered a deal last year that ensured that no taxpayer dollars were used for the risk corridor program, and subsequently given to insurance companies. Following his role in limiting taxpayer exposure through the risk corridor program, Rubio’s office said the Florida Republican will “ensure that Congress takes appropriate action in protecting people from the disastrous law.”
“He led the successful effort to stop health insurers from getting a taxpayer-funded bailout and will continue that fight with the reinsurance program,” Kristen Morrell, spokeswoman for Rubio, told The Daily Signal. “It is just another desperate attempt by the Obama administration to move money toward big health insurance companies and protect those who lost by participating in Obamacare.”
“Hardworking Americans have already been failed by the president’s false promises of what the law could do, and they should not carry the burden of funding the law and the insurance companies who helped get it passed,” she continued.
Obamacare’s transitional reinsurance program was designed to mitigate risks insurance companies incurred by covering individuals who were previously uninsured, and runs from 2014 to 2016.
Under the program, the law instructs the Centers for Medicare and Medicaid Services to raise $12 billion in contributions from insurers in 2014 and $8 billion through contributions in 2015. Of the money raised in those two years, $2 billion was to be returned to the Treasury in 2014, with another $2 billion returned in 2015. The remaining funds were to go to insurers and to cover administrative costs.
The Centers for Medicare and Medicaid Services collected less money than it anticipated for 2014, and instead of remitting the $2 billion to the Treasury—as specified under the Affordable Care Act—the government distributed the money to insurers.
For 2015, the Centers for Medicare and Medicaid Services announced last month it would prioritize insurers over payments to the Treasury once again, and the agency diverted $1.5 billion to insurers instead.
In response to inquiries from the Ways and Means and Energy and Commerce Committees regarding whether the Centers for Medicare and Medicaid Services had the authority to direct money away from the U.S. Treasury, the Congressional Research Service issued a memo last week stating that the Obama administration was “in conflict” with the Affordable Care Act.