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Obamacare at Six: Six Ways the Administration Violated Its Own Health Care Law

March 21, 2016

This week marks the 6th Anniversary of Obamacare. In trying to make the President’s failing health care law work over the last six years, the Obama Administration has done more than break its promises to the American people. It has unilaterally rewritten its own law to satisfy special interests – providing further proof that Washington’s one-size-fits-all health care system is unworkable and must be repealed and replaced.

This week, the Ways and Means Committee will spotlight six ways the Obama Administration has flagrantly violated the letter and spirit of its own law. Each violation has placed what Washington bureaucrats and special interests want above what patients, providers, and taxpayers need and deserve. Below are just two ways the Administration has violated its own health care law:

Violation #1: Using Deficit Reduction Dollars to Pay Off Insurance Companies

Current law requires the Centers for Medicare and Medicaid Services (CMS) to deposit a certain portion of fees collected under Obamacare’s Transitional Reinsurance program into the Treasury for deficit reduction. Section 42 U.S.C. § 18061(b)(4) of the law explicitly prohibits CMS from using these fees to pay health insurance companies.

Despite the clear statutory prohibition, on February 12, 2016, CMS confirmed that as much as $2 billion for 2014 and $1.5 billion for 2015 would be diverted from the Treasury to make more generous payments to insurance companies through the Transitional Reinsurance Program. In doing so, the Administration made clear its plan to illegally use taxpayer dollars to pay off special interests.

Ways and Means Committee Chairman Kevin Brady (R-TX), Oversight Subcommittee Chairman Peter Roskam (R-IL), and Health Subcommittee Chairman Pat Tiberi (R-OH) last month called on the Administration to immediately return all diverted funds back to the Treasury. Instead, the Administration defended their violation of the law and doubled down on their intention to prioritize insurance companies over our nation’s fiscal health.

Violation #2: Unilaterally Rewriting Payment Formulas to Benefit Insurance Companies

Many insurance companies raised concerns that the President’s health care law would force them to insure sicker, older, and more expensive beneficiaries, negatively affecting their bottom line. To address these concerns, the Administration included two provisions in its Obamacare law: the individual mandate – which forces everyone to have health insurance or face a tax penalty – and three risk mitigation programs, including a risk corridor program – which provides payments to insurers who lose money on the exchange plans.

The Administration unilaterally changed the risk corridor payment formula to provide more money to insurance companies. Moreover, the Administration has promised to make participating insurance companies whole despite legal prohibitions. This is a blatant attempt to save the health care law by preventing insurers from exiting the exchanges.

To protect taxpayers from funding this open-ended bailout for insurance companies, Congress acted to ensure the risk corridor program used only collections from profitable health insurance companies to offset the payments to health insurance companies experiencing losses.

The Ways and Means Committee will continue to monitor the Administration to ensure taxpayers are protected from these power-grabs moving forward.

Tune in tomorrow for two more ways the Obama Administration has broken its own law.