Congress must keep its promise to give insurers billions of dollars in unpaid ObamaCare funds, the Supreme Court ruled Monday.
The 8-1 decision on the $12 billion risk corridor program is a victory for insurers, but comes well after the funding could have had an impact on the ObamaCare law.
The risk corridor program was meant as a temporary financial incentive that Congress offered insurers to stabilize premiums and encourage participation in the insurance exchanges. The program sought to discourage insurers from setting premiums high by protecting those with sicker customers then expected.
Insurers that made money were supposed to pay into a fund, which was used to reimburse plans that lost money. However, insurers quickly lost money and the program paid out more than it took.
But Republicans called the program an insurer “bailout,” and introduced measures that prohibited the use of taxpayer dollars to fund the program, which sharply reduced the amount of funds available for reimbursement payments.
According to experts, the decision destabilized the marketplace for years as insurers fled the exchanges or jacked up premiums.
But the justices on Monday said that Congress had an obligation to pay.
“We conclude that [the ACA] established a money-mandating obligation, that Congress did not repeal this obligation, and that petitioners may sue the Government for damages in the Court of Federal Claims,” Justice Sonia Sotomayor wrote for the majority.
“These holdings reflect a principle as old as the Nation itself: The Government should honor its obligations,” the court ruled.
Justice Samuel Alito was the only dissenting opinion.
Alito said the Court provided a “massive bailout” for insurance companies.
“Under the Court’s decision, billions of taxpayer dollars will be turned over to insurance companies that bet unsuccessfully on the success of the program in question. This money will have to be paid even though Congress has pointedly declined to appropriate money for that purpose,” he wrote.
The ruling represents a loss for the Trump administration and congressional Republicans, although it will have no practical impact on the law itself. The administration is still backing a lawsuit by GOP-led states to have the Supreme Court overturn the entire law later this year.