GAO: Admin Needs Congress To Approve Insurer Payments Under Obamacare

The Obama administration can’t spend funding on a bailout for insurance companies in Obamacare exchanges without an express appropriation from Congress, according a nonpartisan legal opinion.

The health-care law’s controversial risk corridors provision allows Obamacare administrator the Centers for Medicare and Medicaid Services to collect user fees from insurers taking part in Obamacare exchanges and, presumably, to redistribute them to the companies that are struggling the most.

The program is intended to incentivize insurers to join Obamacare exchanges, cutting back on any fear they might have of pricing their health plans too low and taking a large financial hit by attracting sick, expensive customers.

The Obama administration believes that it can hand out this money on its own, without congressional approval, because the text of the Affordable Care Act provides that the Health and Human Services secretary “shall pay” risk corridor funding to exchange health plans that qualify (although that power’s now been delegated to the CMS chief). But according to the General Accountability Office, that’s not the case.