To be sure, for profit (and co-op) insurers under-priced their product, in the early days of ObamaCare. This was in part due to the insurers' expectations that the mandate (and related penalty provisions) would effectively drive essentially all Americans to procure some form of health insurance. Truthfully, largely due to GOP resistance, post 2012 (and especially post 2014) -- fewer people bought and paid for health insurance than projected. And those who did were in the main less healthy than projected.
All of that led to large losses, at the insurers. When the Obama administration set out to make good on the promise to make payments in the event that the insurers had in good faith miscalculated, the GOP once again filed suits (ultimately successful ones), claiming that later amendments meant that Mr. Obama could not make these stabilization payments.
Prior to today, on a lovely summer Sunday morning, I haven't written about the insurers' suits to recover these payments.
But given that 45 is openly threatening now to force ObamaCare to implode, by issuing administrative rules which guarantee that the insurers who stay in, will be rendered insolvent (or at least saddled with punishing losses) -- I will now cover the topic of the insurers' federal suits, going forward. A great wealth of well-thought out analysis resides at this U. of Michigan law professor's blog (update: to be fair, he is just a contributor -- doesn't run the joint). Do start there, for background. And, here's the Politico story, this morning -- and a bit:
. . . .“The legal issue that all of [the insurers] would be raising would be identical,” said Nicholas Bagley, a professor at the University of Michigan Law School who has written extensively about the lawsuits. “Has a promise been made, and has the federal government reneged on that promise?”
The program’s funding restraints forced many insurers to raise premiums higher than expected in the Obamacare marketplaces. The shortfall has been especially tough on small insurers and Obamacare co-ops, nonprofit health insurers seeded with federal loans to compete with legacy providers. Many were counting on the risk corridor funding and didn’t have the resources to absorb the financial blow when the money didn’t come through. About two-thirds of the 23 Obamacare co-ops have shut down.
“The whole system was to attract insurers like my client, Land of Lincoln, to participate in the first place,” said Daniel Albers, an attorney representing the failed co-op. “The Republicans want to say it’s a bailout. It’s not a bailout.”
Legal experts who support Obamacare say the health care law doesn’t explicitly prevent the government from making payments to insurers. Instead, they say the statute only provides the formula for determining which insurers pay into the program and which ones get paid.
“Nowhere does it say they have to balance out,” said Tim Jost, emeritus professor at the Washington and Lee University School of Law.
At least one observer is betting that insurers will ultimately receive risk corridor payments they’re owed. Juris Capital last week agreed to pay $10.5 million to the estate of HealthyCT, a defunct nonprofit insurer. In return, it will receive up to $31 million if HealthyCT wins its lawsuit. . . .
Now you know -- and the good news here is that the Democrats are now pivoting, post the win in the Senate this week -- to offer bipartisan tweaks to ObamaCare (what I will call ObamaCare 2.0) -- in short, to lead -- where the 45th President will not. He pouts and threatens, while the adults in the room move forward to solve problems. So. . . onward to a workout, a nephew's birthday celebration. . . and an easy dinner, on the 23rd floor rooftop garden terrace, in the city, later tonight. Travel well -- and travel light, all you graceful spirits that now take flight. . . . smile.
नमस्ते
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