Looking for a Health Insurance Quote?

Get a free quote in under 5 minutes with our online form!

GET A QUOTE

Health Insurance Companies Lawsuit Against Obamacare Still Growing

Meredith Miller | Published: July 07, 2018

Man weighing justice

The Affordable Care Act (ACA) remains a stubbornly resilient and contentious piece of legislation. The flurry of legal filings against the controversial law known as Obamacare continues unabated. The health insurers themselves are now taking aim at the law in a series of new court filings. More than 116 insurers have joined in a class action Obamacare lawsuit alleging that, under the conditions set forth in the ACA, they are owed billions of dollars in uncompensated funds.

The lead plaintiff in the ACA lawsuit is Wisconsin-based Common Ground Healthcare, but the group includes insurance heavyweights like UnitedHealthcare, as well as other Wisconsin operators such as Dean Health Plan, Security Health Plan, and Network Health Plan. Common Ground contends in the Obamacare lawsuit they are owed reimbursement payments in excess of $100 million alone, with more than $12 billion in total outstanding to all insurers. The company’s customers, like Americans across the country, will shoulder these costs through skyrocketing premiums.

What The Obamacare Lawsuit Is About

This issue all stems from a provision in the ACA known as the risk corridor program. It was one of several programs designed to stabilize the market as insurance companies were forced to bring onboard patients with costly pre-existing conditions. The ACA made denying coverage illegal, so the risk corridor program was created to help insurers meet these costly new demands.

Insurers priced their plans for 2014 under the conditions set forth in the ACA. Congress, however, stepped into the fray in late 2014, adding riders to budget appropriations bills and limiting disbursement of the risk corridor funds. Common Ground’s Obamacare lawsuit essentially argues that Congress cannot change the mechanisms of its own laws through appropriations bills, but must instead change the law itself. Given the failure of the GOP-controlled Congress to repeal the law, this seems unlikely.

A recently overturned appellate ruling in the Court of Appeals for the Federal Circuit of Washington, D.C. has added several more twists to the legal battle over the ACA in general, and Common Ground’s ACA lawsuit in particular. The ruling sustained the use of Congressional appropriation bills to modify the Federal Government’s obligations to the insurers. Moda Health Plan, the plaintiff in the appellate ruling, will most likely appeal their Obamacare lawsuit all the way to the Supreme Court.

Shift In Lawsuit

Common Ground has, since filing the original ACA lawsuit, amended the case to address the Trump’s administration more recent decision to stop cost-sharing reduction subsidies. This was another stabilizing element written into the ACA, intended to reduce premiums and deductibles for low-income customers in the insurance marketplace. The insurers are required by law to pay for this coverage, with or without the subsidies. These subsidies amount to another $13 million that Common Ground alone is owed; once the other insurers are added in that amount may reach more than $3 billion. Unlike the risk corridor payments, the cost-sharing subsidies were not eliminated through a congressional appropriation bill, but rather by order from the White House.

Common Ground believes the appellate ruling strengthens their ACA lawsuit as it pertains to the cost-sharing subsidy claim. Where the Supreme Court will land on this is harder to determine with the recent retirement of Justice Kennedy. These cases will take several years to wind their way through the court system. It is hard to gauge where Congress or the Trump Administration will be by that point, but it is certain the litigious battleground around the Affordable Care Act remains as fraught as ever.