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Supreme Court Hears Another Obamacare Case, With A Twist

The U.S. Supreme Court examined Obamacare for the fifth time on Tuesday, only this time the justices cast their skeptical gaze on Republican efforts to hobble the law.

Enacted by a Democrat-controlled Congress in 2010, the Affordable Care Act promised to partially reimburse insurers if they lost money by covering people with preexisting conditions. The law said that the government "shall" make these payments. But in 2015, Republicans, by then in control of both houses of Congress, attached riders to appropriations bills barring the use of the money for the promised payments.

The consequences were profound. By 2017, three-quarters of the original insurance providers were out of business and several others stopped participating, leaving just six insurance providers and skyrocketing costs.

The insurers went to court, contending the government had cheated them of $12 billion in promised payments. One of those insurers is Maine Community Health Options, a nonprofit.

On the steps of the Supreme Court on Tuesday, Kevin Lewis, the company's CEO, said that since 2015, the government has failed to live up to its promise to cover $59 million of the company's losses, and the failure to pay has hurt badly.

"We had to pull back from New Hampshire," Lewis said. "We had to do certain things that injured the company and injured our members. And we have only been able to crawl back from that."

"Special solicitude for insurance companies?"

Inside the Supreme Court, lawyer Paul Clement, who is representing the insurers, told the justices that the case involves a "massive government bait-and-switch." When the government makes a promise to pay money, he said, it has to "keep its promise."

Should there be some sort of "special solicitude for insurance companies?" asked a caustic Justice Samuel Alito.

Chief Justice John Roberts chimed in: You claim the insurance companies were "basically seduced" into this program, but they have good lawyers. Why didn't they "insist upon an appropriations provision" in the law before putting themselves "on the hook for $12 billion?"

Clement replied that when the law was written in 2010, anyone who looked at the money-mandating language would have thought that was sufficient. "Now could it have been better ... belt and suspenders," asked Clement. "Sure, but it's good enough."

The tone of the argument changed dramatically, however, when Trump administration Deputy Solicitor General Edwin Kneedler rose to defend the refusal to pay.

$10 for a hat, $12 billion for insurance: What's the difference?

This is "Day 1 of contracts" law, said Justice Stephen Breyer. "I say to you: My hat's on the flagpole. If you bring it down, I'll pay $10. You bring it down. I owe you $10. Now, how does this differ" from the issue here. "Why does the government not have to pay its contracts just like anybody else?"

Kneedler replied that without an appropriation by Congress, the government can't pay.

Justice Ruth Bader Ginsburg pointed to the language in the ACA mandating government payments. There were insufficient votes in Congress to repeal that obligation, she observed.

Roberts piled on:"You don't question that these insurance companies would not have participated in the risk corridor program, but for the government's promise to pay."

"What kind of a statute is that?"

Justice Brett Kavanaugh observed that Congress knows how to pass a law that prevents a promise to pay from being binding in the future. It can promise to pay, "subject to future appropriations." In fact, he added, Congress often uses that language.

That "puts people on notice," interjected Justice Elena Kagan. "It says this is not a guarantee." And when that language is "not there, the government says we're committed."

Under this program, Kagan asked, are insurance companies obligated to pay into the program if they have excess profits.

"Yes," replied the government's Kneedler.

"You pay in, that's obligatory," Kagan shot back, but if the government commits to paying out, it's only "if we feel like it?" she said incredulously. "What kind of a statute is that?"

A decision in the case is expected by summer.

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