Published March 11, 2016
Republican critics say an ObamaCare program is breaking the law by shorting the U.S. Treasury -- and therefore U.S. taxpayers-- billions of dollars collected from the insurance industry.
Rep. Joe Pitts, R-Pa., chairman of the health subcommittee of the Energy and Commerce Committee, called it “an illegal wealth transfer from hard-working taxpayers to (insurers).”
He recently joined Republican colleagues in grilling Health and Human Services Secretary Sylvia Burwell about the shortfall of money supposed to be flowing into Treasury coffers - as mandated in the Affordable Care Act of 2010.
They followed up that hearing by sending a letter this week seeking clarification from the administration, according to The Hill.
Under the law, money is collected each year from insurers for the ACA’s reinsurance program, which helps plans taking on higher costs associated with sicker enrollees.
While $10 billion was supposed to go back to the market to pay those costs in 2014, the first year, an additional $2 billion was supposed to go to the U.S. Treasury under the law. It never arrived.
That was because not enough money was brought in to cover both, so the administration prioritized. Then HHS published a new rule saying payments would be made to insurers first in the event of a shortfall.
The rule, set in 2014, was published publicly for comment and received no reaction at the time, Burwell told a Senate Appropriations Committee hearing when the matter was raised again by lawmakers last week.
According to health care law expert Tim Jost, a professor at Washington & Lee University School of Law, the reinsurance program is not permanent and was instituted as a way to shoulder some of the burden for the new costs connected with new, at-risk enrollees who weren’t able to get adequate coverage before ObamaCare.
The reinsurance program was to collect $10 billion from insurance companies in 2014, $6 billion in 2015, and $4 billion in 2016. The Treasury would get $2 billion in 2014 and 2015 and $1 billion in 2016.
In 2014, according to reports, only $9.7 billion was collected from the industry , and 2015 totals were expected to be short, as well.
Critics say the law is clear: the Treasury gets the money and it cannot be transferred elsewhere, even if that “elsewhere” is to the insurance companies for the reinsurance program.
According to The Hill, presidential candidate Sen. Marco Rubio, R-Fla., teamed up with Sen. Orrin Hatch, R- Utah, to write a letter decrying the administration’s moves.
“The statute in question is unambiguous, and the HHS regulation and recent practice violates its clear directive,” the letter read.
Jost is not so sure. He says it all depends on how the mandate is interpreted. “(The administration’s) reading of the statute is, that the reason for adopting this program was to establish a reinsurance program, and therefore if there was a shortfall the money collected should first go to reinsurance,” and if more is collected, “only then would it go to the Treasury,” Jost told Foxnews.com. “(Republicans) say that reading is wrong.”
“It’s a disagreement on how to read the statute,” he added, “but I don’t think there is anything illegal, unconstitutional or immoral in respect to what the administration is doing.”