GOP lawmakers press ObamaCare official on ‘illegal’ payments

Republican lawmakers on Friday pressed a top ObamaCare official on payments to insurance companies that they say are illegal. 

{mosads}The lawmakers say the administration has violated the text of ObamaCare by prioritizing payments to insurers over payments to the U.S. Treasury in a “bailout” of insurance companies. 

“The administration cannot rewrite its own law to make it more convenient for special interests,” said Rep. Tim Murphy (R-Pa.), the chairman of the Energy and Commerce investigations subcommittee that convened the hearing. 

Rep. Frank Pallone Jr. (N.J.), the committee’s top Democrat, lamented that Republicans were once again attacking ObamaCare, stating: “Hearings like this only serve to hurt Americans and reverse the progress that has been made for the millions who now benefit from the law.”

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].” 

At the hearing, however, Andy Slavitt, the acting administrator of the Centers for Medicare and Medicaid Services (CMS), countered that the administration has the legal authority to prioritize payments to insurers. 

He argued that the law is not clear on what should happen when there is a shortfall of funds coming into the program, as was the case here, and therefore the CMS has the ability to interpret the law so as to prioritize payments to insurers. 

He also said that the CMS’s interpretation went through a public rule-making process, and “not one commenter questioned the legality or appropriateness of the approach.”

Murphy argued the move is a sign of the “cozy relationship between insurance companies and this administration.”

He argued that without the reinsurance money to insurers, the health law would be heading even faster toward collapse. 

“The administration’s actions appear to be trying to delay the inevitable: the collapse of the Affordable Care Act,” Murphy said. 

Slavitt noted that the reinsurance payments have the beneficial effect of helping to reduce premiums for consumers, and said the program is a “critical building block of the law.”

Democrats pointed out that Republicans in Congress supported a similar program as part of the Medicare prescription drug bill passed under former President George W. Bush. 

Congressional Republicans have been stepping up their charges that the administration is violating the law on a range of ObamaCare programs. They have sued the administration over the law’s “cost-sharing reductions,” which help reduce out of pocket costs for consumers, and have subpoenaed documents about the law’s Basic Health Program, which provides insurance to low income people who do not qualify for Medicaid. 

“This is just the latest of a long line of examples of the administration breaking its own signature law in an attempt to prop it up,” Murphy said. 

Sen. Ben Sasse (R-Neb.) this week introduced a bill aimed at the situation, which would cut the Department of Health and Human Services’s budget unless it paid the full amount to the Treasury under the reinsurance program. 


The Hill has removed its comment section, as there are many other forums for readers to participate in the conversation. We invite you to join the discussion on Facebook and Twitter.

See all Hill.TV See all Video

Most Popular

Load more


See all Video