Today, a Federal Judge ruled that the Federal government does not need to reimburse insurance companies for over $12 billion in the “risk corridor” program under the Affordable Care Act (ACA). As background, the risk corridor program was designed to lessen financial losses for insurers during the initial years of the ACA. However, Congressional Republicans have likened this program to a “bail-out” for insurance companies and were instrumental in blocking its funding. The Federal Circuit Court agreed that Congress could lawfully withhold funding from this program. While this decision applies only to the cases brought by health insurers Moda Health Plan and Land of Lincoln Mutual Health, it is likely that it will affect all other cases involving the same issue. Of course, if the insurers appeal, the decision could be reviewed by the full Federal Circuit or the U.S. Supreme Court. For more details, see Land of Lincoln Mutual Health v. U.S. and Moda Health Plan Inc. v. U.S.
For more information on this topic, contact your Health Care Law counsel at Smith, Gambrell & Russell.