The health-care system touches every single American. The Affordable Care Act (ACA) market was created to make sure it does. Its creation served to remind all of us—insurers, physicians, researchers, employers, pharmaceutical manufacturers, policy-makers and individuals—that we share a responsibility to make health care more accessible, more affordable, and more effective.
An unwavering commitment to this responsibility, borne out of our company’s legacy of taking on difficult but critically important health-care work, was the reason that three years ago, Highmark Inc. filed a lawsuit against the federal government for failing to live up to its responsibility—in this case, a statutory and contractual responsibility to all insurers that invested in serving the ACA market. Our decision to take this action was not based on politics. We agreed to enter into the ACA marketplaces in good faith and with repeated assurances from the government that it would fulfill its legal obligations.
The U.S. Supreme Court the week of June 17 is expected to decide whether to grant review in cases involving the ACA’s “Risk Corridors Program.” This program has been a critical component of the law’s mission to expand health insurance coverage by encouraging health insurance companies to issue affordable and comprehensive coverage to millions of previously uninsured Americans. In turn, the federal government promised to pay insurers that experienced excessive losses during each of the first three years of the ACA program a portion of their losses. Insurers who turned a certain level of profits, were required to, and did, pay a portion of those gains to the government.
Bait and Switch
In 2016, when numerous risk corridors disputes reached the federal appeals court that hears such cases against the federal government—cases that represented more than $12 billion in total losses during the first three years of the ACA program—the U.S. Court of Appeals for the Federal Circuit ruled that while the government’s legal obligation to pay did exist, it was eliminated because a subsequent Congress decided not to allow certain funds to be used to pay it. Many of us would refer to this decision as a classic bait-and-switch.
This unprecedented court ruling, finding that Congress implicitly repealed one of its own laws, defies over a century of controlling precedent as the Supreme Court petitioners and their numerous amicus supporters have pointed out. It also threatens to destroy the very foundation of trust upon which all private-public partnerships—critical to a well-functioning U.S. economy—necessarily are based. As the petitioners forcefully argue, the government must be held to its word and accountable to the voters. It should not be able to “promise boldly and renege obscurely.”
But there are even greater stakes than that—the need to hold the government, no more or less than anyone else, to its word. If the decision is allowed to endure, an express promise that the government “shall pay” will be read as having an implicit and significant, but silent, warning: The government shall pay, but, if and only if, a future Congress later decides that it wants to pay. This, quite obviously, is no promise at all.
Imagine if the federal government requested a private company to build an aircraft carrier to support our armed forces and upon delivery, decided they would not pay for it. Imagine if this happened to critical social services in the face of natural disasters such as Hurricane Michael in 2018, when many private companies readily volunteered their products and services in partnership with government agencies because they believed in a strong mutual commitment to supporting Americans in need.
“You shouldn’t have trusted us” is the last message our government should be sending if it wishes to continue to attract the private sector to participate in bold and significant federal programs, projects and contracts; particularly new or innovative ones that pose substantial risks. If such a “buyer beware” environment is permitted to prevail, the consequences may be dire. Trepidation and lack of trust will lead the private sector to bargain only warily, if at all, with the government, stifling meaningful private-public partnerships that undeniably are vital for our country’s future prosperity.
It is imperative that the Supreme Court grant review, hold the government to its $12 billion promise, and prevent the detrimental long-term consequences that inevitably will result if the lower court’s ruling is allowed to stand.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
David L. Holmberg is president and chief executive officer of Highmark Health, a national health and wellness enterprise based in Pittsburgh. He also serves as chairman of the board of Highmark Inc., the health insurance affiliate of Highmark Health.