Health insurers in the Affordable Care Act market got a major win Tuesday when the Montana Health Co-op became the first plan to win its case for cost-sharing reduction payments.
Montana Health Co-op said it is owed an estimated $5 million in CSRs for 2017.
United States Court of Federal Claims Judge Elaine Kaplan said it didn't matter that Congress never appropriated the funds, as argued by the Department of Justice. Kaplan sided with the Montana Health Co-op that said the Affordable Care Act created the mandatory obligation whether Congress approved the funds or not.
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Judge Kaplan directed the parties to file a joint status report on or before October 4.
CSRs were set up under the ACA to allow insurers to pay the deductibles and other out-of-pocket costs for lower-income consumers.
The Department of Health and Human Services began making the CSR payments in 2014.
In that same year, Republicans in the House of Representatives sued the Obama Administration over the payments, saying they and others in Congress had never approved the funds. They won and an appeal was brought, but under President Donald Trump, the appeal became moot.
In 2017, Attorney General Jeff Sessions issued an opinion that the funds were never appropriated and the government stopped the payments.
While insurers no longer received the funds, they were still mandated under the ACA to offer to qualifying consumers the benefit of lower out-of-pocket costs.
Several insurers filed lawsuits, including Blue Cross Blue Shield of Vermont, Maine Community Health Options, LA Care Health Plan and Sanford Health Plan, according to Health Affairs. Common Ground Healthcare Cooperative led a class action lawsuit.
Insurers have also filed lawsuits to get payments promised through another ACA program, risk corridors. Under the three-year, budget neutral risk corridors program, the government was to take money from plans that had fewer higher risk beneficiaries and give the funds to those that suffered losses in insuring higher risk consumers.
In making her decision Tuesday, Judge Kaplan cited a lawsuit brought by Moda Health Plan over risk corridor payments. In that case, the Federal Circuit Court said the government was obligated to make risk corridor payments to insurers.
But that case was overturned in mid-June, when a majority of a three-judge panel of the Court of Appeals for the Federal Circuit said the government did not have to pay health insurers the full amount owed to them in risk corridors payments.