Skip to content

BREAKING: Nonpartisan Watchdog Rules Obamacare Reinsurance Scheme Unlawfully Diverting Billions From Taxpayers

House and Senate GOP Health Leaders Urge Administration to Halt “The Great Obamacare Heist,” Stop Illegally Diverting Taxpayer Dollars to Insurance Companies

WASHINGTON, D.C. – A group of bicameral Republican health care leaders are pointing to a new legal opinion issued on Obamacare’s controversial reinsurance program. The leaders urged the Comptroller General of the United States this spring to publish a legal opinion on the Centers for Medicare and Medicaid Services’ (CMS) decision to ignore federal law, and a previous CMS regulation that required taxpayers and the Treasury be paid under the Obamacare reinsurance program. To date, CMS has ignored the rule of law to divert billions of federal dollars to insurance companies at the expense of American taxpayers and the Treasury.

“…[W]e conclude that HHS lacks authority to ignore the statute’s directive to deposit amounts from collections under the transitional reinsurance program to the Treasury and instead make deposits in the Treasury only if its collections reach the amounts for reinsurance payments specified in section 1341,” wrote the nonpartisan Government Accountability Office (GAO)“The agency is not authorized to prioritize collections in this manner. The agency must give effect to the extent possible to all of section 1341, and, to do so, is required to collect and deposit amounts for the Treasury, regardless of whether its collections fall short of the amounts specified in statute for reinsurance payments. HHS may not use amounts collected for the Treasury to make reinsurance payments.”

At question is the Transitional Reinsurance Program established in section 1341 of the Affordable Care Act. A nonpartisan analysis by the Congressional Research Service earlier this year confirmed that the Obama administration is acting in conflict with a plain reading of law.

Several lawmakers requested an independent legal opinion, referencing a recent ruling that the administration is illegally spending billions in cost sharing reduction (CSR) payments as further evidence of the White House’s disregard for the rule of law. On May 12, 2016, the U.S. District Court for the District of Columbia said the Obama administration violated Article 1, Section 8 by paying insurers for the CSR program without a congressional appropriation.

The Obama administration previously affirmed Republicans’ position on both programs, issuing rules (2014/2015), which required a portion of the contributions be deposited into the U.S. Treasury, as well as requested an annual appropriation for the cost-sharing reduction program.

“This is about fairness and respect for the rule of law clearly anchored in the Constitution,” said the lawmakers listed below. “The facts are simple – the Constitution is on our side. This new opinion from the government’s top watchdog confirms that the Obama Administration is not above the law. The Administration needs to put an end to the Great Obamacare Heist immediately.”

The request was submitted to the GAO by:

  • Chairman Kevin Brady (R-TX), House Ways and Means Committee
  • Chairman Fred Upton (R-MI), House Energy and Commerce Committee
  • Chairman Tom Price (R-GA), House Budget Committee
  • Chairman Lamar Alexander (R-TN), Senate Health, Education, Labor, and Pensions Committee
  • Chairman Orrin G. Hatch (R-UT), Senate Finance Committee
  • Chairman Mike Enzi (R-WY), Senate Budget Committee
  • Chairman John Barrasso (R-WY), Senate Republican Policy Committee

CLICK HERE to read the GAO’s opinion.