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Supreme Court rules federal gov't owes ACA insurers $12B

Supreme Court rules federal gov't owes ACA insurers $12B
The ruling is a setback for the Trump administration, which argued the government isn't obligated to make payments for the fund. File Photo by Kevin Dietsch/UPI | License Photo

April 27 (UPI) -- In a near-unanimous decision, the U.S. Supreme Court ruled Monday the federal government owes insurers involved in the Affordable Care Act billions from a program that was supposed to shield them from financial risk.

The court said in an 8-1 ruling -- with Justice Samuel Alito the lone dissenter -- that the government owes $12 billion from the temporary fund, despite Republicans later passing rules that prevented the Department of Health and Human Services from using taxes to pay for the program.

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ACA creators had initially planned for insurers to pay for the fund.

"These holdings reflect a principle as old as the Nation itself: The Government should honor its obligations," Justice Sonia Sotomayor wrote for the majority.

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The ruling is a setback for the Trump administration, which argued the government isn't obligated to make payments for the fund. It will have little impact on the ACA itself, however.

Alito argued in dissent that the decision would give insurance companies access to billions from a program they should have been funding themselves.

"Under the court's decision, billions of taxpayer dollars will be turned over to insurance companies that bet unsuccessfully on the success of the program in question," Alito wrote. "This money will have to be paid even though Congress has pointedly declined to appropriate money for that purpose."

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Insurance experts said the demise of the program, which closed in 2016, led to insurance companies hiking premiums on ACA plans and abandoning the healthcare marketplace.

The Supreme Court has agreed to hear a separate ACA challenge, from Republican-led states, that argues the law is unconstitutional. The high court is expected to hear the case later this year.

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