A federal court has ruled against one of the insurance companies that has sued the federal government for more than $70 million over losses it incurred due to Obamacare, throwing into doubt the other similar cases brought against the administration, The Hill reported.
The Land of Lincoln Mutual Health Insurance Company said the government owed them money under the Affordable Care Act's risk corridor program, which was designed to help offset losses for insurers providing individuals affordable coverage regardless of their medical history in the early years of Obamacare, but Congress passed spending bills that limited the amount to be paid under that program, the Chicago Tribune reported.
When the Chicago-based company did not receive the full payments, it was liquidated in October and coverage for its nearly 50,000 customers was terminated.
The court ruled, however, the government reasonably interpreted the law in determining the payments and it did not break any contract with Land of Lincoln.
Another insurance company suing the government over the risk corridor payments, Pittsburgh-based Highmark, told the Pittsburgh Post-Gazette it is basing its case on a different legal argument and does not have the same judge as the one who ruled in the Land of Lincoln suit.
Forbes reported recently Obamacare insurers in the risk corridor program lost more than $5 billion in 2015, bringing total losses for the past two years to more than $8.3 billion, despite the fact insurance companies received some $8 billion that helped offset their cost due to government subsidies that lower the cost of consumers' plans.
It is unclear what the judgment of the other lawsuits will be, but The Hill reported the administration is considering covering its insurance-industry debts by tapping into the Judgment Fund, a 60-year-old entity designed to settle government debts.
However, 46 members of the House have already signed a letter warning the administration against such a bailout, because it would circumvent the clear intent of Congress when it passed spending bills that limited the amount the government could pay to insurers under the risk corridor program.
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