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Insurers Due Full Amount of Obamacare Cost-Sharing Pay: Brief

March 16, 2020, 7:01 PM

The federal government must pay health insurers the full amount of Obamacare cost-sharing payments they would have received had the government not unlawfully refused to make them, insurers trying to recoup billions in lost payments told a federal appeals court.

Community Health Choice Inc. and Maine Community Health Options urged the U.S. Court of Appeals for the Federal Circuit March 13 to disregard government arguments that the court should limit their damages if it affirms judgments in their favor.

Government lawyers argued that the insurers’ use of a practice called “silver loading,” in which they were allowed to increase premiums for mid-level plans sold on federal and state Affordable Care Act exchanges, more than made up for anything they lost when the government stopped making the payments.

But the higher premiums meant people qualified for higher tax credits. People used those credits to buy higher-level plans with premiums that hadn’t changed, so insurers actually didn’t make any more money as a result, they said.

In any event, the insurers’ damages should be measured by the payments the government owes but hasn’t made, they said. The insurers fully performed their obligations to reduce consumer costs for low-income plan members. They should receive the full reimbursement the government promised them in return, the brief said.

Damages can’t be reduced based on events that happen after they’re incurred, the insurers said.

Congress included the cost-sharing program in the ACA to help insurers deal with the disruption caused by the law’s requirement that they cover people with preexisting conditions. But lawmakers never appropriated the money to pay for it.

The insurers, in various lawsuits, said the government was obligated to pay them anyway. They won in the trial courts, but the Federal Circuit seemed skeptical in oral arguments that took place in January. The appeals court ordered the parties to file supplemental briefs on the damages issue.

Faegre Drinker Biddle & Reath LLP and Crowell & Moring LLP represent the insurers.

The case is Cmty. Health Choice, Inc. v. United States, Fed. Cir., No. 19-1633, supplemental brief filed 3/13/20.

To contact the reporter on this story: Mary Anne Pazanowski in Washington at

To contact the editors responsible for this story: Rob Tricchinelli at; Nicholas Datlowe at