A coalition of over 50 conservative organizations has sent a letter to Members of Congress demanding that they act to block a possible bailout of Obamacare.
The coalition, organized by Freedom Partners, includes Americans for Prosperity, the Competitive Enterprise Institute, Citizens Against Government Waste, Freedom Works and dozens more. Their letter says Congress should act to recover money owed to taxpayers under Obamacare’s reinsurance program and act to prevent a bailout of insurers under the risk corridors program. The letter reads in part:
In classic fashion, the Obama administration has indicated intentions to work around Congress to get what it wants. In a Sept. 9 memorandum, the Center for Medicare and Medicaid Services said it is open to resolving baseless lawsuits filed by insurance companies seeking additional payments under the Risk Corridor Program. Through settlements, the administration could bypass Congress altogether and continue to misuse taxpayer dollars to pay for bailouts.
Thankfully, there are actions that Congress can take to stop this. The first is to recover the $5 billion illegally given to insurance companies through the reinsurance program by passing the Taxpayers Before Insurers Act (S. 2803, HR 5904), sponsored by Senator Sasse and Congressman Walker. The second is to prevent this from happening again — Congress should continue the budget neutrality provision in the risk corridor program, as well as pass legislation preventing the administration from using the “Judgment Fund” or any other taxpayer dollars to give money to insurers.
American households deserve better than to have their tax dollars go toward bailouts for insurance companies. Thank you for your attention to this important issue.
Last month the Government Accountability Office determined that the Obama administration had overstepped its authority when it chose to pay out all of the money collected by the Obamacare reinsurance program and deliver it to insurers rather than delivering a portion of it to the U.S. Treasury as required by the text of the law. The GAO report concludes, “We do not see any flexibility under section 1341(b)(4) to allow HHS to expend the pro rata share of collections attributable to the Treasury under section 1341(b)(3)(B)(iv)—approximately $3 billion as of July 2016—to make reinsurance payments.” In other words, the Obama administration has taken it upon itself to stiff the taxpayers for $3 billion, so far, and had no legal authority to do so.
And, as the letter above explains, the administration also seems to be working itself up to bypass the clear will of Congress and bailout insurers through legal settlements. There is some confusion on when (or if) this will happen as lawyers for the DOJ recently rejected the argument that the government owed the insurers anything.
The Obama administration has no right to do any of this but that may not matter. Obamacare is President Obama’s legacy and that legacy is in trouble. He may be willing to break the rules in his final months in office counting on the fact that he won’t be around by the time Congress or the courts react to him once again overstepping his authority.
Note: I updated the text above to clarify that Freedom Partners was the group organizing the coalition.