Supreme Court Rules for Insurers in $12 Billion ACA Case
The U.S. Supreme Court ruled 8-to-1 that the federal government must live up to its promiseto shield insurance companies from some of the risks they took in participating in the Affordable Care Act exchanges. The law established the risk corridors to help insurers cope with the risks they took when participating in the insurance marketplaces without knowing who would sign up for coverage, and the federal government was charged with limiting insurers' gains and losses on insurance sold in the marketplaces between 2014 and 2016.
If premiums exceeded a company's medical expenses, the insurer would be required to pay some of its profit to the government. But if premiums fell short of medical expenses, the insurer would be entitled to payments from the government. Justice Sonia Sotomayor, writing for the majority, said the court’s decision vindicated “a principle as old as the nation itself: The government should honor its obligations.” Losses substantially outpaced gains, and under the terms of the law, the government was required to make up much of the difference.