U.S. to Pay Over $12 Billion to Insurance Companies in Affordable Care Act Supreme Court Case

A Supreme Court decision today will result in the United States Federal Government to pay “more than $12 billion” to insurance companies as a result of a “now-expired” Affordable Care Act program.

Under a program known as “Risk Corridors”, the Affordable Care Act encouraged insurers to sell insurance plans on a new, government-run online marketplaces. Using this “Risk Corridors” program, the Federal Government promised to “compensate insurers for unexpectedly unprofitable plans during the marketplaces’ first three years”.

Logistically, the program operated as follows: “If an insurance plan loses a certain amount of money, the Federal Government “shall pay” the plan; if the plan makes a certain amount of money, the plan “shall pay” the Government.”

While, insurance companies which made money paid the government, “[t]he Government, however, did not pay.”

Although Congress repealed this program, the Supreme Court today declares “the Affordable Care Act established a money-mandating obligation, [and] that Congress did not repeal this obligation”.

Supreme Court Justices therefore ruled 8-1 for the Federal Government to pay this outstanding balance.