The Affordable Care Act has cost taxpayers a bundle, and now the U.S. Supreme Court says they are on the hook for billions of dollars in additional payments to insurers even though Congress never appropriated the money. The ruling will be even more expensive if it encourages more lawsuit demands for unappropriated funds from other statutes.
That’s the meaning of Monday’s 8-1 ruling upholding payments to health insurers for so-called risk corridors in ObamaCare’s first three years (Maine Community Health Options v. U.S.). Congress created the scheme to lure insurers to offer policies in the insurance exchanges, promising to make up for losses resulting from mispricing in the early going. Democrats claimed the program would pay for itself because the payments would come from other insurers that made money.
That would be no, Speaker Pelosi. Over three years the risk-corridor plan was $12 billion in the hole. Meanwhile, Republicans won the House in 2010 and refused to appropriate the money to make up for those insurance losses.
They called it a “bailout” for insurance companies, and attached language in spending bills that barred the Obama administration from making risk-corridor payments despite language in Obamacare saying the Secretary of HHS “shall pay” to insurers that lost money.
The insurers sued, and now comes the Supreme Court to say they are owed the money because Congress created an “implied” right of action in Obamacare. This is a slippery subject because the court has recently been reluctant to read implied rights of action into law unless Congress has been explicit.
Congress writes laws all the time that authorize payments for this or that purpose only to decide later to appropriate less money or none at all in any given year. The appropriation power controls in the end, and the Constitution says no money shall be spent unless Congress appropriates it. Let’s hope the court is reading this as a narrow one-time exception to its implied-right wariness.
Justice Alito strikes us as having the stronger legal argument, but the majority doesn’t agree and now taxpayers will pay for another Obamacare provision that had to pass before we found out what was really in it.
FROM AN EDITORIAL IN THE WALL STREET JOURNAL