END OF 2018 OPEN ENROLLMENT PERIOD (42 states)

Time: D H M S

The GOP is finally forced to return to the scene of the #RiskCorridorMassacre.

Hey, remember the #RiskCorridorMassacre?

...In fairness, as Adam Cancryn noted in his epic Risk Corridor Autopsy piece, there were a lot of other factors which caused half of the Co-Ops to fail in the first two years. It's possible that some of them would have gone under even with the RC money, and there's no guarantee that all of the remaining ones will thrive or even survive. But there's no denying that the RC payments they were counting on were a major factor, and at least a few of them would almost certainly have survived if not for having the rug yanked out from under them.

So, to review, the end result of Marco Rubio's shenanigans are:

  • up to 800,000 people nationally lost their insurance coverage, on very short notice, and were forced to scramble to find alternate coverage
  • the new coverage these people ended up with is generally more expensive, and in many cases has worse networks
  • the federal government has to therefore pay out more in premium subsidies to cover the increased costs as benchmark plans were increased
  • over a dozen insurance carriers went out of business, meaning hundreds of people lost their jobs
  • the loss of over a dozen carriers means less competition in those markets, therefore less competition, therefore higher premiums, therefore even more cost to the federal government in subsidies to make up the difference
  • since all of the carriers which went out of business were little guys, this also means the big kahunas suck up even more market share
  • the original $2.5 billion which Rubio was supposedly trying to "save" taxpayers ends up being paid out anyway; and
  • it's possible that, in addition to all of this, assuming the government decides to just concede the point (which, by all rights, they should), it's conceivable that Marco Rubio's "genius" stunt from December 2014 could also very well end up costing taxpayers $2.5 billion MORE than it would have to just let the government make the payments they were supposed to in the first place.

...all so that Marco Rubio could earn a couple of political brownie points to help him win the GOP nomination for President...which he appears to be failing at anyway.

The first few carrier lawsuits versus the federal government didn't go very well, but the latest one, by Moda Health of Oregon, is taking a very different course. Nicholas Bagley has the skinny:

A judge on the Court of Federal Claims has entered a $214 million judgment against the United States in favor of Moda Health, an Oregon insurer. Moda sued to recover money owed to it under the risk corridor program, a three-year program that was supposed to protect insurers from excessive losses on the exchanges. In emphatic language, the court ordered the government to pay up.

The Court finds that the ACA requires annual payments to insurers, and that Congress did not design the risk corridors program to be budget-neutral. The Government is therefore liable for Moda’s full risk corridors payments under the ACA. In the alternative, the Court finds that the ACA constituted an offer for a unilateral contract, and Moda accepted this offer by offering qualified health plans on the [exchanges].

Today, the Court directs the Government to fulfill [its] promise. After all, “to say to [Moda], ‘The joke is on you. You shouldn’t have trusted us,’ is hardly worthy of our great government.” Brandt v. Hickel, 427 F.2d 53, 57 (9th Cir. 1970).

This is exactly right. Even before the first risk corridor lawsuit was filed, I argued that insurers had viable claims against the federal government for any deficiencies. I’ve expanded on that view in an article in the New England Journal of Medicine and in extensive coverage on the blog. It was only a matter of time before a court entered a money judgment against the United States.

Bagley goes on to note that the grand total owed ot the various carriers will likely end up being well over $10 billion...but that even if the Supreme Court ultimately ends up demanding that Congress pay up, it's conceivable that they still won't do so due to the convoluted route through which the payment would have to flow.

As Bagley concludes:

 Our president, however, has a track record of stiffing business partners. I wouldn’t be surprised if he signed a law doing just that.