A U.S. Court of Claims ruled Thursday that the feds had "breached the contract by failing to make full risk corridors payments as promised," and handed over to the Oregon insurance company Moda the $214 million summary judgement:
There is no genuine dispute that the Government is liable to Moda. Whether under statute or contract, the Court finds that the Government made a promise in the risk corridors program that it has yet to fulfill. Today, the Court directs the Government to fulfill that promise. After all, “to say to [Moda], ‘The joke is on you. You shouldn’t have trusted us,’ is hardly worthy of our great government.” Brandt v. Hickel, 427 F.2d 53, 57 (9th Cir. 1970).
In effect an attack against the ACA Republicans launched under President Obama is now a mess that President Trump's administration will need to clean up.
"We are reviewing the decision and have no further comment," the Justice Department told TPM when asked for a response to the ruling. The HHS' Centers for Medicare and Medicaid Services, which is responsible for implementing the risk corridors program, declined to comment.
There are a few other percolating lawsuits brought by insurers against the U.S. government for the shortfalls in the payments. According to University of Michigan Law School professor Nicholas Bagley, the major question isn't whether courts will side with insurers (he believes they will), it is how lawmakers will move forward in making the payments as the insurer victories pile up in court. Bagley estimated that government could ultimately be on the hook for as much as $15 billion in total.
"Refusing to pay is a shabby way to treat insurers, which entered the exchanges in reliance on the federal government’s promises," Bagley wrote at the blog, Incidental Economist. "Our president, however, has a track record of stiffing business partners. I wouldn’t be surprised if he signed a law doing just that."