U.S. Supreme Court rules for Maine health insurer in ACA case

394
advertisementSmiley face

A near-unanimous U.S. Supreme Court vindicated a Maine nonprofit insurer’s financial claims under the Affordable Care Act.

Heather Bouffard, a representative of Community Health Options of Lewiston, said the April 27 ruling was a “welcome surprise” because the company hadn’t expected a ruling before late May or June.

The 8-1 decision in Maine Community Health Options v. United States, written by
Associate Justice Sonia Sotomayor, with only Samuel Alito dissenting, was one of several cases before the court involving the Obama-era ACA. It consolidated other cases filed by insurers concerning the now-defunct Risks Corridors program that promised – but did not deliver – compensation from the federal treasury to participating companies.

Community Health Options, which has 37,000 policyholders, will receive $59 million; insurers nationally will get a total of about $12 billion.

“We paid into the Risk Corridors program in our first year of operations, but when it came time to offset some of our losses in 2015 and 2016, the government yanked away that mitigation in defiance of the law,” Bouffard said.

Congress in 2015 – a year Republicans regained full control – in effect zeroed out funding for the program without changing the statutory language requiring payment, which became the issue the court had to decide. Congress discontinued the program after 2016.

The majority opinion was based largely on the Tucker Act, an 1887 statute that waives the government’s sovereign immunity rights in certain circumstances, such as contract awards. Because the insurers’ claims were based on past contracts, not future claims, they should be upheld, Sotomayor wrote, calling it “a money-mandating obligation.”

In his lengthy dissent, Alito charged that the majority was “providing a massive bailout for insurance companies that took a calculated risk and lost.” He raised the same point last December during oral arguments, but won over no other justices.

While the court’s award removes uncertainty from the company’s balance sheet, which carried the delayed payments as a liability, it is unlikely to result in any new insurance offers or hiring by the 170-employee company.

Still, Bouffard said, the infusion is welcome. “Funds will go to replenish our surplus, which further strengthens Community Health Options for the long haul – especially at a time where there is great economic uncertainty,” she said.

The company’s long fight was not without its twists and turns, with adverse rulings in the lower courts before the Supreme Court took the case.

“This ruling demonstrates (our) perseverance and willingness to fight for an important principle,” Bouffard said, “that the government should fulfill its contractual commitments.”  

Douglas Rooks has covered Maine issues for 35 years as a reporter, editorial writer, columnist, and former editor of Maine Times.