Thursday, May 26, 2016

Administration Improperly Funded ACA Cost-Sharing Subsidies

Dianne De La Mare

US District Judge, Rosemary Collyer, has held that the federal government has improperly spent billions of dollars over the past two years to reimburse insurance companies for providing health coverage at lower costs to low- and moderate-income consumers (US House of Representatives v Burwell). Judge Collyer has not taken any immediate action to stop this spending, however, and is instead allowing her decision to be challenged on appeal (either to a federal court of appeals or directly to the US Supreme Court).

There is no doubt that the Obama Administration will appeal, especially because this controversy goes to the key question of whether the private insurance industry will remain willing to provide lower-cost health coverage through the ACA exchanges, or marketplaces, that have now enrolled millions of new consumers.

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