OUT OF BOUNDS: Obamacare Agency Stiffs Treasury, Illegally Funnels Billions to Insurers to Prop Up Health Law


Like clockwork, on a recent Friday heading into a holiday weekend, the Obama administration dumped some news – some pretty big and expensive news. The Centers for Medicare and Medicaid Services (CMS) announced reinsurance payments for the 2015 benefit year, which on its surface might appear bland. However, the payments amount to billions of dollars in handouts to insurance companies, and it’s taxpayers who are footing the bill.

What’s worse, the handouts are in direct violation of the president’s health care law. Sadly, this wasn’t the first time they’ve done this.

Section 1341 of Obamacare mandates that $2 billion of the reinsurance assessments collected for the 2014 and 2015 benefit years be returned to the U.S. Treasury Department. Last fall, CMS ignored the clear text of the law and instead gave those funds to Obamacare issuers –unlawfully diverting money from taxpayers to insurance companies instead. For that year, the agency collected $9.6 billion in assessments and paid out $7.9 billion – leaving $1.7 billion in excess funds. CMS then ultimately carried those funds over to the 2015 benefit year, denying the Treasury of the $2 billion they were required to remit.

Fast forward to last Friday, when CMS said they would only remit $500 million of the required $2 billion for the 2015 benefit year. That means in the last two years, CMS gave insurance companies $3.5 billion.

The law is clear. This money “shall be deposited into the general fund of the Treasury of the United States and may not be used for the [reinsurance] program established under this section” (click here to read Sec. 1341, pgs. 90-93, quoted from bottom of page 92).

The Obama administration’s blatant disregard for the plain letter of the law is becoming commonplace.

In December 2015, House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Ways and Means Committee Chairman Kevin Brady (R-TX) wrote to Secretary of the Treasury Jack Lew and Secretary of Health and Human Services Sylvia Burwell following up on their repeated requests for information regarding the cost-sharing reduction program in Obamacare.

The committee leaders then expressed their concerns with payments the administration has been making to insurance companies under the health care law from a fund intended for tax refunds after the administration requested – but did not receive from Congress – an appropriation of funding. The Obama administration has paid more than $5 billion to insurance companies, despite lacking the legal authority to make these payments.

That brings the total to over $8.5 billion in handouts contrary to law the Obama administration has diverted away from taxpayers. The administration is ignoring the law, doing whatever it takes to artificially prop up Obamacare. And its American taxpayers who are paying the price.


Health (114th Congress)