A possible settlement with insurance companies over payments due to them under Affordable Care Act rules is being discussed, according to an Obama administration health official.
The Hill reports Andy Slavitt, acting administrator of the Centers for Medicare and Medicaid Services (CMS), indicated at a congressional hearing that someone in his department discussed settling insurer lawsuits with the U.S. Department of Justice.
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Several insurers have brought suits against the administration over money they are owed under an ACA program called risk corridors. The program is intended to protect insurers from heavy losses during the early years of the ACA, but payouts have been limited because of a shortage of funds.
Republicans are opposed to any such settlements, claiming that Congress passed a measure in 2014 that was designed to keep any additional money from being moved into the program, but judicial settlements could provide the administration with a workaround that would allow the money to be paid.
Related: GOP shifts on ACA
The risk corridor program, which is three years in duration, is designed to stabilize the market and premiums in the early years of the ACA, but thus far insurers have received only 12.6 percent of the money they were owed under the program for the first year. As a result, several have sued to be paid the additional funds.
Although Republicans termed it a "bailout" of insurers, Democrats pointed out that Republicans added similar programs to protect Medicare's prescription drug program in 2003, and did not complain about them at the time.
Republicans are also concerned that the administration might attempt to make any potential settlement payments from a "judgment fund" to avoid the strictures of the 2014 measure, even though they say that a Clinton administration legal opinion would prevent the judgment fund from being used to satisfy such obligations.
A document from the CMS was quoted in the article referring to the insurer lawsuits and saying, "As in any lawsuit, the Department of Justice is vigorously defending those claims on behalf of the United States. However, as in all cases where there is litigation risk, we are open to discussing resolution of those claims. We are willing to begin such discussions at any time."
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