ObamaCare's risk corridor corruption never ends
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The Obama Administration just caught a lucky break in its legal war with the insurance industry.
 
A federal court has ruled that the administration doesn't owe money to Land of Lincoln Mutual Health Insurance Company, a shuttered Illinois health insurer that was promised more than $70 million under the ObamaCare's "risk corridor" program. 
 
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The lawsuit is one of almost a dozen being waged by insurance companies that have lost billions on the health law's exchanges.  These coverage providers only participated in the exchanges because of the administration's promise to bail them out in the event of serious losses. 
 
The Land of Lincoln ruling gets federal officials off the hook for at least one insurer payoff. As for the rest of the coverage firms that are owed money, the administration is still scrambling for a way out of this sordid deal.
 
The risk corridors were never more than a bribe to get insurers into ObamaCare's marketplaces. The program was supposed to transfer excess funds from exchange plans with lower-than-expected claims to insurers with higher-than-expected claims to safeguard them against losses.
 
The exchanges' finances haven't worked as planned. At 11.1 million, this year's enrollment is less than half what the Congressional Budget Office expected.  On top of that, young people only made up 28 percent of enrollees in 2016 -- well below the 40 percent needed to keep the exchanges financially viable. 
 
With so many coverage providers hemorrhaging cash, not many plans have been able to pay into the risk corridor pot. In fact, 2014 collections totaled only $382 million -- nowhere near the $2.87 billion promised to insurers. 
 
And so, in the program's first year, the Centers for Medicare and Medicaid Services made good on only 12.6 percent of insurers' risk-corridor claims.  
 
Many of the companies that have exited the exchanges blame that shortfall for their failure.  Land of Lincoln was one of the seventeen non-profit CO-OPs to have closed after crippling financial losses. Twenty-three of these health plans were added to ObamaCare after the "public option" was removed from the Senate version of the bill. And several were counting on big risk-corridor payments to stay solvent.  
 
The situation only got worse in 2015, when losses for exchange insurers in the individual market more than doubled to $5.2 billion. That same year, risk-corridor contributions amounted to a mere $89 million. 
 
It was only a matter of time before insurers took the federal government to court. Blue Cross of Idaho is among the latest to sue, claiming $79.3 million in missing payments.  In a separate lawsuit, Blue Cross Blue Shield of North Carolina is suing for $147 million. 
 
But the government can't legally give into insurers' demands. The law requires the risk corridors to be budget-neutral.  So the feds can only send out what they collect from insurers, unless Congress appropriates additional funds. 
 
And with Republicans in control of both the House and Senate, that's not going to happen.
 
Remarkably, the administration seems open to flouting the law in order to take care of its insurance-industry debts. In September, federal officials hinted that they'd tap something called the Judgment Fund, a 60-year-old entity housed in the Treasury Department and designed to settle government debts. 
 
Forty-six members of the House have signed a letter warning the administration against such a bailout.  "It's an end run on the clear . . . intent of Congress," said Rep. Morgan GriffithHoward (Morgan) Morgan GriffithVirginia reps urge Trump to declare federal emergency ahead of Hurricane Florence Conservatives blame McCarthy for Twitter getting before favorable committee Bipartisan leaders of House panel press drug companies on opioid crisis MORE (R-Va.). 
 
Griffith and his fellow Republicans may have an unlikely ally -- the Obama administration's own Department of Justice. In October, the DOJ moved to dismiss two risk-corridor lawsuits -- rejecting the very premise that the federal government owes those insurers a cent. 
 
"Congress did not include in the ACA either an appropriation or an authorization of funding for risk corridors," the DOJ said. "Congress removed any ambiguity when it . . . prohibited HHS from paying risk corridor amounts from appropriated funds other than collections." 
 
It's not yet clear whether Team Obama's pro- or anti-bailout forces will win out. But the losers are already clear -- the taxpayers who have been forced to underwrite this mess and the patients who are left with limited exchange options and soaring premiums and deductibles. 
 
It's small wonder that voters have sent to the White House a candidate that has vowed to repeal Obamacare on day one of his administration.
 
Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The Way Out of Obamacare (Encounter 2016).

The views expressed by authors are their own and not the views of The Hill.