Congressman Morgan Griffith (R-VA) introduced a bill to prevent the Obama Administration from potentially bailing out insurance companies by limiting the use of the Justice Department’s Judgement Fund (H.R.6339 – To limit the use of the Judgement Fund to settle any lawsuit arising under section 1342 of the Patient Protection and Affordable Care Act, and for other purposes.)
Background: The Risk Corridor program was designed as protection for insurance companies who lost money in the Obamacare exchanges. Fees were paid into the program by the participating insurance companies. Then, the program was intended to reimburse insurance companies who lost money through participation in the exchanges. The fees were intended to compensate for any and all losses. However, for the first year of the program, 2014, when the insurance companies made their claims, the Center for Medicare and Medicaid Services (CMS), estimated the funds available would only provide insurers with 12.6% of the requested funds. This resulted in a shortfall of over 2 billion dollars, and insurance companies are suing for the full amount. Congress required these payments be budget neutral, meaning CMS could only pay out what it took in from the fees, but there is speculation the Judgement Fund will be used to pay the insurance companies the 2 billion requested, without the consent of Congress. Although the court cases are not yet finished, one judge rejected the insurance company’s claim that the federal government owes the plaintiffs the full amount lost under the program.
Congressman Griffith said: “I asked Acting Administrator of CMS, Andy Slavitt, if the federal government was obligated to pay insurance companies who lost money from Obamacare the full amount they lost, through the Risk Corridor Program. After stumbling, Slavitt said, ‘Yes. It’s an obligation of the federal government.’ I was concerned with his response, since the fund is over 2 billion dollars short. Furthermore, he implied they are working with the Justice Department, and could possibly use the Judgement Fund.”
“Using the Judgement Fund to settle the lawsuits and pay out the insurance companies would be ignoring congressional intent. The bill I introduced today makes it clear ‘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.’”
“Like many aspects of Obamacare, the Risk Corridor program failed. This bill prevents the Obama Administration from handing out massive payments, and relieves the American taxpayers from having to bail out these health insurance companies with the Judgement Fund.”"