Republicans on Capitol Hill are questioning the legality of a move by the Obama administration to give billions to insurers under a program implemented under Obamacare that they say is equal to an insurer bailout.
At issue for lawmakers on the House Energy and Commerce Committee is whether the Centers for Medicare and Medicaid Services violated the Affordable Care Act by diverting $3.5 billion intended for the U.S. Treasury to insurance companies.
“[Earlier this month], the administration announced that they would be using billions of taxpayer dollars to make payments to insurance companies under the Obamacare reinsurance program,” Rep. Joe Pitts, R-Penn., said Wednesday during a hearing with Department of Health and Human Services Secretary Sylvia Mathews Burwell.
“The announcement that the administration made represents an illegal wealth transfer from hardworking taxpayers to insurers,” he continued, “and this law is very clear—$5 billion of reinsurance fees must be returned to the taxpayers.”
Experts have pointed out that with the absence of payments to the U.S. Treasury in 2014 and 2015, the Centers for Medicare and Medicaid Services owes the U.S. Treasury $3.5 billion in payments from the transitional reinsurance program—$2 billion for 2014, and $1.5 billion for 2015.
“CMS to date has diverted $3.5 billion from the Treasury to help the insurance companies, effectively bailing out insurance companies with taxpayer dollars,” Pitts said.
Pitts argued that the Centers for Medicare and Medicaid Services violated the law by prioritizing reinsurance payments to insurance companies instead of the U.S. Treasury.