06.19.14

HHS Ignores Rule Of Law To Transfer Billions Of Dollars To Insurers Through PPACA Risk Corridor Program

WASHINGTON—The Department of Health and Human Services this week responded to a recent letter from Senate Budget Committee Ranking Member Jeff Sessions (R-AL) and House Energy and Commerce Committee Chairman Fred Upton (R-MI) regarding the department’s legal authority to issue payments under the President’s health care law’s risk corridor program. Now, HHS argues that the risk corridor program would be considered a user fee in order to justify its authority to make payments under the program, but risk corridors were not listed as a user fee in President Obama’s own FY 2015 budget, released just a few months ago.

“Chalk up another executive fiat for this imperial presidency,” commented Upton. “This reversal underscores the Administration’s disregard toward the law and Congress, and reveals its ‘whatever it takes’ and ‘whatever it costs’ effort to prop up this broken law.” 

Sessions commented, “HHS now says that its entire legal authority to make risk corridor payments is predicated on the funds being treated as ‘user fees.’ But as recently as last year, the President’s budget deposited risk corridor payments into the Treasury general fund—conclusive proof that they are not user fees. HHS’ letter serves to confirm our suspicions.”

Sessions and Upton explained that both the nonpartisan Congressional Research Service and precedent from the Government Accountability Office raise major questions about the ability of HHS to make payments through the program. The congressional leaders wrote that because the law itself “does not specify a specific source of funding for the program… HHS may not make payments under Section 1342 absent additional congressional action appropriating funds for such payments. Without an explicit appropriation, any money spent on the risk corridor program would be based on an illegal transfer of funds and your agency could be held in violation of the Antideficiency Act.”