Amounts owed to insurers range from tens of thousands to hundreds of millions, with Kaiser Foundation Health Plan owed the most at $220.3 million. (Photo: Shutterstock)
The federal government has been ordered by a federal judge to fork over $1.6 billion in unpaid subsidies to about 100 health insurers.
Modern Healthcare reports that although the government is expected to appeal, the judgment is the result of a class action suit brought by Wisconsin-based Common Ground Healthcare Cooperative in the wake of the Trump administration's failure to pay up on subsidies that should have lowered health care costs for some of those who bought health coverage on the Affordable Care Act exchanges.
Judge Margaret Sweeney in the U.S. Court of Federal Claims ruled in favor of Common Ground and the plaintiffs in similar lawsuits back in February. Sweeney ruled that the Trump administration's abrupt cutoff of cost-sharing reduction subsidies at the end of 2017 was a violation of its obligation to pay. The government, for its part, cited Congressional failure to appropriate the payments as its reason to halt the payments.
Amounts owed to insurers range from tens of thousands to hundreds of millions, with Kaiser Foundation Health Plan owed the most at $220.3 million for the period spanning 2017 and 2018 for plans in several states. Multimillion-dollar settlements are also owed to Blue Shield of California and Blue Cross and Blue Shield of South Carolina, as well as to Utah-based SelectHealth, Dayton, Ohio-based CareSource and New York-based Oscar Health.
When Trump cut off the payments, insurers raised rates to make up for the missing CSRs. And far from saving the government money by ending CSRs, the action ended up compelling the government to pay higher premium tax credits than it would have had the CSRs continued.
Sweeney ordered insurers to file reports citing how much each was owed for the 2017–2018 period, with her ruling on claims delivered on Tuesday.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
