U.S. government liable for Obamacare losses

The U.S. Supreme Court ruled 8-1 on Monday that insurance companies can collect a total of $12 billion from the federal government if they lost money due to the Affordable Care Act. Justice Samuel Alito in his dissent said the decision provides “a massive bailout for insurance companies that took a calculated risk and lost.”

Why does the government owe insurers? President Barack Obama’s signature healthcare law included a provision promising a financial cushion for losses the companies might incur by selling coverage in the Obamacare exchanges. The program only lasted three years, but Congress inserted a provision in the U.S. Health and Human Services Department’s spending bills from 2015 to 2017 to limit the payments. Both the Obama and Trump administrations argued the provision means the government is off the hook. But Justice Sonia Sotomayor said the congressional action wasn’t enough: “The government should honor its obligations.”

Dig deeper: Read Harvest Prude’s report in The Sift about another Obamacare case awaiting a Supreme Court decision.