Republicans: ObamaCare payments break the law

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Republicans are putting heightened scrutiny on ObamaCare payments that they argue break the law.

They say the administration is violating the Affordable Care Act by prioritizing payments to insurers over payments to the U.S. Treasury, and have grilled Health and Human Services Secretary Sylvia Mathews Burwell about the matter at recent hearings.

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"The announcement that the administration made represents an illegal wealth transfer from hard-working taxpayers to [insurers], and this law is very clear," Rep. Joe Pitts (R-Pa.), the chairman of the Energy and Commerce health subcommittee, said at a hearing with Burwell last month.

This week, Republicans followed up with letters to the administration seeking documents on the administration’s decision-making process.

At issue is ObamaCare’s reinsurance program, which is designed to protect insurers against high costs for sicker enrollees in the early years of the law. Under the program, the government collects money from insurers and then gives it to plans with high-cost enrollees. 

The reinsurance program was designed to collect $10 billion in its first year of existence, 2014, while collecting another $2 billion that would be deposited into the U.S. Treasury.

But not enough money was brought in to cover those amounts, so the administration, through regulations in 2014, prioritized giving money to insurers. None of the money was given to Treasury for the first year.

Republicans say that action clearly violates the healthcare law, which states that $2 billion “shall be deposited into the general fund of the Treasury of the United States and may not be used for the program established under this section [i.e. the payments to insurers].” 

To support their case, Republicans point to a report from the nonpartisan Congressional Research Service that found the administration’s interpretation “would appear to be in conflict with a plain reading” of the law.

Burwell said at a hearing last month that she had not seen the CRS report. 

The administration has emphasized that no complaints were raised at the time the decision was announced in regulations, and in fact said that all of the comments were positive. The American Academy of Actuaries praised the decision to prioritize payments to insurers over the Treasury, saying the move could help lower premiums.  

“We believe that we have the authorities, and as I mentioned [earlier], we actually published for comment and notice the approach that we were going to take to use those authorities, and did not have any of the concerns raised as part of that public process,” Burwell said under questioning at a Senate Appropriations Committee hearing last week. 

Burwell added that she did not know if there was a legal memorandum justifying the decision. “I don’t know if it was done in that form,” she said. “I would say that we believe we have the authorities.”

Sen. Marco RubioMarco RubioOvernight Finance: Lawmakers float criminal charges for Wells Fargo chief | Scrutiny on Trump's Cuba dealings | Ryan warns of recession if no tax reform The Trail 2016: Just a little kick Opposition to Obama's radical disarmament agenda has proven effective MORE (R-Fla.), who is running for president, wrote a letter to Burwell on Tuesday with Sen. Orrin HatchOrrin HatchOvernight Finance: Lawmakers float criminal charges for Wells Fargo chief | Scrutiny on Trump's Cuba dealings | Ryan warns of recession if no tax reform Overnight Healthcare: Watchdog says ObamaCare program made illegal payments GOP senators press Treasury to withdraw estate tax proposal MORE (R-Utah) calling the payment decision “unacceptable.”

“The statute in question is unambiguous, and the HHS regulation and recent practice violates its clear directive,” Rubio and Hatch wrote. 

Tim Jost, a health law expert at Washington and Lee University who supports ObamaCare, said that he found the administration’s interpretation of the law “reasonable,” given that it did not collect enough money to cover all the costs. The primary purpose of the program is payments to insurers, not “general tax collection,” he added. 

“It’s the continuing struggle of the administration to make the statute work,” Jost said.

“There's no possibility of amending [it] to try to fix the statute, so they just proceed in trying to read the statute in a way that makes it actually work,” he added. “So that's what they're doing here.”

Republicans have linked the decision to insurance companies, noting that Marilyn Tavenner, the former head of the Obama administration’s Centers for Medicare and Medicaid Services, is now the chief lobbyist for insurers as head of America’s Health Insurance Plans (AHIP). 

“Did your department receive any pressure from insurance companies to divert billions from taxpayers to pay off insurers?” Pitts said to Burwell.

“Did former CMS Administrator Marilyn Tavenner, now representing the insurance industry at AHIP, or other insurance company executives or officials, ever pressure you or other department officials on the reinsurance issue?”

Burwell did not answer those questions. She said prioritizing the payments to insurers was important to help keep insurance premiums for consumers down. 

The decision was part of “ensuring that those dollars actually went to the place where they would most help the consumer with regard to downward price pressure, and it is our belief we have that authority,” Burwell said.  

Energy and Commerce Republicans sent a letter to Tavenner on Tuesday asking for a briefing by March 15 on the role of insurers in the reinsurance payment decision. 

AHIP declined to comment on the letter or whether it would provide the requested briefing. 

The Energy and Commerce letter said “substantial payments” have not yet been made to insurers. The members of the panel pressed CMS not to go forward with those payments.

Another $1 billion is supposed to be paid to the Treasury through the reinsurance program in 2016, and Republicans hope that payment is made.